What is the ECB trying to tell us?

This week has featured a raft of speeches from the ECB’s Governing Council on the outlook for monetary policy, displaying a range of views among its members. Several would clearly prefer to end asset purchases in September, while others favour a much more cautious approach. We suspect that the majority of members favour a very gradual normalisation of monetary policy. After all, despite strong economic growth, wage growth and inflation are still subdued. We think that the ECB will end its asset purchases this year and then wait until September 2019 to begin raising interest rates.