ECB President, Mario Draghi, provided a boost for European equity markets yesterday when he confirmed the bank was prepared to intensify its current €1.1tn quantitative easing programme of bond-buying if required, and to prolong it beyond its deadline of September next year.

The statement came as the Bank lowered its eurozone growth and inflation forecasts for the next two years and is seen as a response to global concerns that the Chinese economy is slowing rapidly and to a failure to push inflation closer to the bank’s 2% target.

The ECB says inflation will be as low as 0.1% this year, principally due to lower energy prices and 1.5% next year.

Eurozone growth is has been revised modestly to 1.4% this year and 1.7% in 2016.

The euro fell by 1% in response to 1.11 against the dollar. European stock markets closed between 2% and 2.5% higher yesterday evening.