The European Central Bank cuts its inflation and growth forecasts for the euro zone at its latest policy meeting, but holds back from any policy easing measures - for now. David Pollard reports.
Mario Draghi's day began with a fresh warning from the IMF. Risks to the global economy are on the up, it says - central banks like the ECB might have to consider further easing. How would the ECB president respond? SOUNDBITE (English) MARIO DRAGHI, ECB PRESIDENT, SAYING: ''The governing council wanted to emphasise in the discussion we had today its willingness to act, its readiness to act, and its capacity to act, its ability to act.'' So no action now - but certainly not ruled out down the road. The biggest downside risk for the ECB right now: low inflation, or even deflation. China's slowdown putting more downward pressure on prices - the ECB's own target rate of just below 2.0 per cent even further out of reach. But Mint Partners strategist, Bill Blain, sees a firm hand on the tiller. Draghi ready to boost the ECB's current 60-billion euro a month asset-buying programme. SOUNDBITE (English) BILL BLAIN, CAPITAL MARKETS STRATEGIST, MINT PARTNERS, SAYING: ''The market has a lot of confidence that should the China crisis continue to escalate, the ECB stands ready to do - to put it in Draghi's words - whatever is required.'' Though with interest rates already at what the bank itself has called ''the lower bound'', the jury's not unanimous. Michael Hewson from CMC Markets. (SOUNDBITE) (English) MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: ''The ECB is probably operating at the limits of its mandate already and as such it remains very constrained as to what other extra measures it can take.'' In the meantime, Draghi still sees recovery in the euro zone - but at a ''somewhat slower pace''. The ECB revising its growth outlook down to 1.4 per cent for 2015 - inflation now seen at just 0.1 per cent for the year.