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European Central Bank president Christine Lagarde

The move will bring the bank’s Pandemic Emergency Purchase Programme to a total of €1.85trn as it aims to keep borrowing costs low for the public and private sector in the 19 countries that use the single currency.

The PEPP has also been extended by nine months to the end of March 2022, but ECB president Christine Lagarde said purchases will continue “in any case” until the pandemic is judged to be over.

Lagarde said the decisions had been made in light of the larger-than-expected second wave of coronavirus cases in Europe in recent months.

“While the rebound of economic activity in the third quarter was stronger than expected, and the prospects for the rollout of vaccines are encouraging, the pandemic continues to pose serious risks to public health and to the euro area and global economies,” she told a press conference.

“The resurgence in Covid-19 cases and the associated containment measures are seriously restricting euro area economic activity.”

Senior European economist at S&P Global ratings agency Marion Amiot said the ECB’s decision was “grounds for optimism” that the Eurozone economy can recover in 2021.

“European economies will be better placed to withstand these second lockdowns with further central bank support,” she said.

“We expect a 4.8% GDP rebound across the Eurozone in 2021, following a contraction of 7.2% in 2020.” She said the recovery will also be supported by continuing fiscal stimulus from governments, as well as the expected rollout of vaccines.