ECB cuts growth and inflation outlook

The European Central Bank (ECB) has cut its inflation and growth forecasts for 2015 and the next two years.

It expects inflation in the eurozone to remain “very low” for some years as threats to economic growth increase.

ECB president Mario Draghi said Europe’s economic recovery would continue, “albeit at a somewhat weaker pace than expected”.

The euro fell sharply as Mr Draghi also hinted that the bank could expand its stimulus programme if necessary.

He was speaking after the ECB kept its main interest rate on hold at 0.05%.

The ECB is now forecasting economic growth in the eurozone of 1.4% in 2015, down from 1.5%, and 1.7% in 2016, compared with its previous projection of 1.9%.

However, Mr Draghi said that risks to the outlook for economic growth and inflation had worsened since mid-August, when the latest projections were calculated.