The ECB left interest rates and asset purchases unchanged yesterday, but markets responded to Draghi's hint of tightening to send the euro higher against most of its peers.
The European Central Bank (ECB) will discuss changing its monetary policy stance in the "autumn", according to its president, Mario Draghi, delaying a decision on its quantitative easing programme until at least September.
Draghi said that quantitative easing asset purchases will continue until the end of December at a rate of €60bn (£53bn). However, the ECB announced, but the central bank is widely expected to give markets early warning of how it will proceed after that.
Draghi denied that the central bankers had discussed adjusting the programme and said that central bank staff had not done any economic analysis on possible options for changing the stimulus programme.
The next monetary policy meeting takes place on 7 September, but the specific date for announcing a change was "deliberately kept open", Draghi said. There was "unanimous" agreement in the governing council, he said: "don't set dates".
Draghi emphasised the weakness of inflation across the Eurozone. The headline inflation measure remains at 1.3 per cent, while underlying inflation (minus volatile energy and food prices) remains at 1.1 per cent, well below the ECB's two per cent target.
UK retail sales grew faster than expected last month, helped by sales of summer clothes as the country was treated to unusually hot weather. The UK enjoyed the hottest temperatures since 1976 last month, with readings regularly above 30C.
According to figures from the Office for National Statistics, the quantity of goods sold in stores and online rose by 0.6 per cent in June, beating economist forecasts and following a fall of 1.2 per cent in May. Non-food items particularly drove sales, offsetting declines across food and fuel, suggesting that consumers are still willing to spend – even on non-essential items – despite the squeeze of rising inflation.