Madrid, October 17

Mario Draghi will take centre stage next week as the European Central Bank (ECB), steeped in concern over sluggish eurozone growth and struggling to increase consumer prices, takes stock of how effective its stimulus measures have been so far.

Not that the ECB chief is expected to take drastic action when the governing council meets in Malta on Thursday — but markets will be looking for signs of how inclined Draghi will be to do so weeks from now.

Lower oil prices dragged eurozone consumer prices into negative territory in September and growth in the currency bloc appears to be slowing again.

That is putting ECB under pressure to expand or prolong an asset purchase scheme already running to over a trillion euros. At the same time, faltering global growth prospects, especially in emerging markets, are also clouding timing of an interest rate increase by US Federal Reserve.

“Draghi is likely to stress the central bank’s readiness to adjust the duration, volume and structure of the quantitative easing purchase programme if need be,” Michael Schubert, Commerzbank economist, said in a note.

Analysts believe quarterly economic forecasts due from the eurozone’s central bank in early December would be more likely to trigger new measures if they proved disappointing, though few see an interest rate cut as a likely option.

The ECB is a little over six months into a plan to buy 60 billion euros of assets a month, mostly government bonds. That scheme runs September 2016, though economists polled by Reuters expect it to be extended beyond then.

With eurozone inflation seen well below the ECB’s target of just under two per cent for this year, some believe the ECB could increase the overall size of the quantitative easing programme from the current 1.1 trillion-euro goal.

The question also starting to haunt markets is what more can be done to stimulate growth when even major eurozone economies such as Germany are turning out poor data.

ECB Governing Council Member Ewald Nowotny suggested in recent days that new instruments outside of bank’s remit may be needed, putting onus on structural measures and policies to stimulate demand.