ECB Minutes: Brexit could cause significant negative spillovers to Eurozone

The European Central Bank released its latest meeting minutes on Thursday and warned Brexit is seen as an 'important source of uncertainty’ and there could be there could be 'significant, although difficult to anticipate, negative spillovers' to Eurozone via a number of channels, including trade and the financial markets.

Policy makers expressed confidence at the meeting that their stimulus measures, including QE program, would continue to underpin a moderate economic recovery in the euro area. The ECB highlighted it remains ready to act by using all the instruments available within its mandate, if warranted, to achieve the bank’s objective of inflation.

About inflation, the ECB said “HICP inflation developments continued to be subdued.” Headline inflation was expected to remain very low or in negative territory for the next few months, before picking up in the second half of the year “largely as a result of the upward impact of base effects in the annual rate of change of energy prices,” the minutes said. Inflation was expected to pick up further in 2017 and 2018.