The European Central Bank is ready to cut interest rates and embark on a fresh round of bond purchases this autumn, a move that that ECB hopes will fend off fears of economic uncertainty and a global economic slowdown.

The bank’s president, Mario Draghi, made clear that all measures available to the ECB will be used as the export-driven European economy is experiencing a severe slowdown due to the German economy – the fourth-largest in the world – posting dismal figures in recent months, a brewing conflict between Brussels and Italy over the latter’s budgetary policy, and the threat of a disorderly Brexit.

Draghi explicitly referred to the ECB’s intention to go beyond the €2.6 trillion bond-buying programme that ended in December 2018 as a way to boost business confidence, He also mentioned, however, the need for government action in the form of fiscal expansion for more financially stable members of the Eurozone.

The ECB does not expect deflation or recession in 2019, but Draghi made clear that interest rates are likely to be cut.

The ECB’s governing council left the benchmark refinancing deposit rate at zero and the deposit rate at -0.4%. The Bank also noted that it would give credit at rates just 10 basis points above its -0.4% deposit rate, effectively paying them to take its money.

Monetary policy alone has failed to produce the target rate of 2% inflation, which in May was merely 1.2%. Inflation is projected to remain subdued. At the first policy meeting for new ECB Chief Economist Philip Lane, inflation was projected to rise by 1.3% this year, 1.4% next year, and 1.6% in 2021.