Quantitative easing has become almost standard practice since 2008, so why has the European Central Bank (ECB) rejected the policy? Central banks in the U.K. and U.S. pumped money into the economy to combat low inflation rates, but many remain concerned by European “lowflation” as prices continue to rise by only 0.5 percent. The ECB avoids buying government debt from its 18 members, choosing to adjust its lending rates instead. It’s a big gamble: Lowflation can quickly become deflation, which would send Europe into a deeper crisis.
Source: The Economist