Summary Given the “gap” between inflation projections and our policy objective, we decided to launch an expanded asset purchase programme. We had to act because the inflation outlook had deteriorated, while our previous measures had not worked as effectively as we expected.
In this environment our decision was fully consistent with our reaction function, which we had communicated last year, and it was only natural for markets to anticipate our move. Indeed faced with an increasing risk of a too prolonged period of low inflation, we intensified our stimulus to a degree necessary to bring inflation closer to 2%.