BRUSSELS: The European Central Bank (ECB) will decide this week if it should dare to dial down emergency stimulus while the pandemic still menaces the eurozone economy.

       The threat posed by the Delta variant of the coronavirus could yet embolden policy makers on Thursday to keep up the “significantly higher” pace of bond purchases they adopted earlier this year. But advanced vaccination rates, a robust rebound and inflation that is already at the fastest in a decade are all reasons to consider a downward shift in gears.

       Until now, the ECB has insisted that any surge in consumer prices is destined to be temporary, allowing officials led by president Christine Lagarde to keep crisis stimulus flowing. That contrasts with global counterparts such as the Federal Reserve, where policy makers may consider a move to scale back asset purchases in November or December, after Friday’s disappointing jobs report made action of this kind unlikely this month.

       With inflation now at 3% in the eurozone, officials are diverging more on the outlook for consumer prices. Greek central bank chief Yannis Stournaras suggested to Bloomberg last week that officials shouldn’t overreact, advising “caution.”

       But in a hint of arguments to come, his Dutch colleague Klaas Knot said that the goal of the ECB’s crisis bond-buying programme, of limiting the damage to inflation inflicted by the coronavirus, is almost achieved. He favours a more restrictive approach to stimulus after the measure’s scheduled end in March.

       Such remarks suggest that whatever officials determine about bond-buying for the coming months, this week’s decision is only the first of several likely skirmishes on the future of ECB monetary policy.

       “The easiest option for the ECB would be to keep buying bonds through PEPP at a ‘significantly higher pace’ until the end of the year. The central bank could begin tapering in January,” according to Bloomberg economists David Powell and Maeva Cousin.

       Elsewhere, at least eight other central banks globally are due to deliver monetary decisions, including Australia and Canada. While most are likely to keep their stance unchanged, Russia and Ukraine could deliver interest-rate increases. — Bloomberg