As Draghi finished speaking US stock markets moved lower at the open.

The Nasdaq composite fell by 0.36%, the S&P 500 lost 0.14% and the Dow Jones industrial average lost 0.04%.

“I am not available” to swap roles with Christine Lagarde to become the head of the International Monetary Fund, Draghi says. It’s not an issue.

And in response to US President Donald Trump’s complaints about “currency manipulation”, Draghi says he does not target the exchange rate as part of his mandate.

A question on Libra, Facebook’s planned digital currency. Draghi was clearly prepared for it, as he read a long list of concerns from his notes.

Libra was not an issue for the governing council but was discussed quite extensively in the G7, Draghi says. There was a pretty unanimous view that there were concerns as well as interest.

They were: cybersecurity, anti-money laundering, terrorism, criminal use, privacy, tax evasion, monetary policy transmission, financial stability and the possibility of changes to the global payments system.

These need to be addressed before regulators will allow Libra, Draghi says. That’s quite the to-do list for Facebook boss Mark Zuckerberg.

A year ago many economists thought Draghi would leave Frankfurt with his first rate hike. That has been proven almost certainly wrong, but there might still be some action before he leaves.

Wolfgang Bauer, fixed income manager at M&G Investment, said:

Mario Draghi’s ECB presidency is likely to end not with a whimper but a bang. After revising forward guidance today, an interest rate cut at the ECB’s upcoming monetary policy meeting in September seems highly likely. In addition, the odds of a revival of net asset purchases have increased significantly.

Market reactions once again proved that central banks currently trump any economic woes. And these have been mounting in Europe: Not long before the ECB’s announcement today, and hardly registered by market participants, the Ifo Pan Germany Business Climate Index had dropped to its lowest reading since April 2013. The danger is that investors become too complacent, relying fully on accommodative monetary policy, and ignore the late-cycle risks that are lingering in the background.

What will Mario Draghi do after his term ends on 31 October?

I haven’t come to a determination, he says, rather boringly.

He’s slightly more interesting on his successor, former International Monetary Fund boss Christine Lagarde.

I think she will be an “outstanding president of the ECB”, Draghi says.

The euro is back at about $1.117 against the US dollar, as Draghi sounds less dovish than the statement suggested.

The recession risk is still pretty low, Draghi says, pointing to high employment and other factors which boost spending.

However, manufacturing is struggling, he acknowledges, with spillovers to other sectors of the economy.

If the worsening outlook continues fiscal policy support will be needed, Draghi says.

*A previous post was edited to correct a typo. Please refresh to see the correct version.

We want to see the next projections before taking action, Draghi says. That sets September as a clear date for any move.

Such complex action (interest rate cuts, quantitative easing, and a possible “tiering” system, which excludes some banks from certain rate cuts to protect them from costly negative rates) need a lot of preparation, he said.

“We don’t like what we see on the inflation front,” Draghi says, talking about the new “symmetry” commitment which would allow them to look past a temporary bump in headline inflation.

There is no cap at 2% inflation, he says.

The governing council will act with the same determination whether inflation is above or below the 2% target, he adds.

There was no discussion of cutting rates as soon as today, Draghi says.

Some of the governing council had different answers on different parts of the package, Draghi says (but they eventually converged).

First question finally done.

The lingering uncertainty on various geopolitical questions is itself a realisation of one of the risks to growth, Draghi says.

He goes through the statement in some more detail, emphasising the easing bias in the notes. There is “a consistent degree of optionality” in the statement, he says.

If the medium term inflation outlook falls short, the ECB is determined to act, he says, pointing to new developments in their thinking. With muted inflation, that spells rate cuts.

Was the decision unanimous to pre-announce an interest rate cut in September?

There was “broad agreement” on the assessment of the current economic outlook, Draghi says.

The outlook is getting “worse and worse in manufacturing especially”, Draghi says, in a nod to recent data showing the German economy is struggling.

Trade wars and, bingo, a hard Brexit, are also risks to the outlook, he says.

Past projections suggested there would be a rebound in the second half of the year; this is less likely now, he says.

Summing up his opening statement, Draghi makes it clear that loose policy is here to stay, and follows with his standard call for some help from governments on the fiscal side.

“An ample degree of monetary accommodation is still necessary” to support the European economy Draghi says.

He asks for a more growth-friendly balance of fiscal policies.

And now on to the questions.

The euro hit that two-year low mark before Draghi started speaking. It traded as low as $1.1100 against the US dollar.

The risks remain tilted to the downside because of geopolitical uncertainties, Draghi says.

Underlying inflation remains generally muted, Draghi says.

Inflation expectations have fallen, so there is more need for support from monetary policy, Draghi says.

Somewhat lower growth is coming in the second and third quarters of the year, he adds.

You can watch him live here, by the way:

Draghi (who is in Frankfurt at the ECB’s headquarters) reads out the governing council’s monetary policy statement.

And now for his more specific comments.

New information indicates that softening global growth dynamics and weak international trade are still weighing on the economic outlook, Draghi says.

He also cites protectionism and emerging market issues – and highlights the weakness in the manufacturing sector.

Mario Draghi is about to answer questions. Expect a lot of trying to catch him out on the timing and mix of stimulus measures.

Hetal Mehta, senior European Economist at Legal & General Investment Management, said:

The European Central Bank (ECB) might have disappointed those looking for an immediate rate cut after the spate of weak sentiment data, but their statement of intent is clear: easing is coming, and soon. A tiered deposit rate, more QE and rate cuts are all options on the menu; Draghi and the rest of the Governing Council are trying to show that they have not run out of tools. Shoring up their credibility is clearly a key priority and they cannot deny any longer that inflation expectations are de-anchored*.

*This post has been edited to correct a typo. It previously read “anchored” rather than “de-anchored”.

The euro is just a whisker shy of two-year lows against the US dollar.

It traded as low as $1.1107 in the aftermath of the announcement. If it breaks below $1.1106 it will be the lowest level since May 2017 by my reckoning – tantalisingly close (if almost entirely of symbolic value).

The pound is now up by 0.3% against the euro for the day. It’s all ECB-driven: against the US dollar sterling is still flat.

An important update:

Thoughts at the press conference (due in about 20 minutes) will turn to what mix of stimulus measures Draghi et al. will consider necessary at the September meeting.

“The ECB is loading its bazooka, but with what?” asks Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics.

As we have persistently noted, the ECB never pre-commits. But this is as close at it gets.

Further easing is on the way. But what kind? We are fairly certain that deposit rate cuts are coming, but today’s initial statement points towards a combination of rate cuts and QE. We are sure that Mr. Draghi will be quizzed intensely about this balance, and options, in the press conference.

Demand for UK government debt has increased, with the yield on the 10-year gilt falling to its lowest level since September 2016.

The yield on the benchmark bond fell to a low of 0.65%. Yields move inversely to prices.

Some reaction from economists is now coming through.

Ana Andrade, analyst at the Economist intelligence Unit, said it has “laid the ground for a cut, but will wait for September to implement further stimulus – which will then be backed by hard data and fresh macroeconomic projections.”

Weak economic momentum and rising deflation risk, as measured by the substantial de-anchoring of inflation expectations over the past few months, call for further action.

The press release reveals a much more dovish stance than expected. Up until now the re-start of QE remained a vague possibility. But the ECB’s decision to task the relevant Eurosystem Committees with examining options for further stimulus, and the formal reinforcement of the ECB’s commitment to the symmetry in its inflation aim leave no room for doubt about the ECB’s willingness to act. Whether by re-starting QE or by substantially cutting the deposit rate.

There could be more quantitative easing on the way, with ECB economists in Frankfurt tasked with looking at options to “reinforce” its interest rates actions.

The ECB’s statement said:

The Governing Council has tasked the relevant Eurosystem Committees with examining options, including ways to reinforce its forward guidance on policy rates, mitigating measures, such as the design of a tiered system for reserve remuneration, and options for the size and composition of potential new net asset purchases.

The euro briefly bounced higher, but has now hit another two-month low of $1.1118 against the US dollar.

Read the ECB’s full statement here.

There is some strong guidance on the future path of interest rates, however.

Policy will remain “highly accommodative” for “a prolonged period of time”.

The Governing Council also underlined the need for a highly accommodative stance of monetary policy for a prolonged period of time, as inflation rates, both realised and projected, have been persistently below levels that are in line with its aim. Accordingly, if the medium-term inflation outlook continues to fall short of its aim, the Governing Council is determined to act, in line with its commitment to symmetry in the inflation aim. It therefore stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner.

A reminder: the 12:45pm BST announcement will be followed by the press conference led by ECB president Mario Draghi at 1:30pm BST.

You will be able to watch the ECB’s webcast of the press conference at this link.

So a quick round-up as we prepare for the announcement: the euro is now flat for the day against the US dollar.

Sterling is up by about 0.14% against the euro and the dollar.

Borrowing costs have been driven lower in expectation of more stimulus. The yield on the German 10-year hit a new all-time low of -0.443% this morning, as investor demand for bonds increased in the expectation of looser monetary policy. Yields move inversely to prices.

With barely 10 minutes left until the ECB’s announcement, perhaps they will take a leaf from Turkey’s book?

Its central bank has slashed the key interest deeply, by 4.25 percentage points, in a first monetary policy meeting under its new governor. The interest rate was cut on Thursday to 19.75% from 24%, the Associated Press reports.

President Recep Tayyip Erdogan dismissed the previous governor, Murat Cetinkaya, on July 6 over disagreements on interest rate cuts and reiterated his belief that interest rates are “the mother of all evil.”

Cetinkaya was replaced by Murat Uysal, the deputy governor.

Jacob Rees-Mogg, newly appointed leader of the house of commons, has resigned from his role at a London-headquartered hedge fund, according to the London Evening Standard.

Rees-Mogg is a co-founder at Somerset Capital Management, and has earned hundreds of thousands of pounds as a partner at the firm. He was paid about £15,000 per month for 30 hours’ work every month for the past year, according to the latest register of members’ interests.

The firm last year gained notoriety after it set up an investment fund in Ireland and warned prospective clients about the financial dangers of a hard Brexit.

Boris Johnson has promised to make the UK the “greatest place on earth” in his first statement to the house of commons. Quite the echo of another blond world leader (and no mention of extraterrestrial ambitions from earlier in the week).

Michael Gove is in charge of no-deal planning – what the Brexit department will be doing is unclear.

A lot of spending plans: more money for the National Health Service; 20,000 new police officers; more funding for schools.

And tax cuts as well, although sparse on the detail so far.

On migration, he points to an Australian points-based system, but says EU nationals will have a right to remain in the UK.

You can follow in a lot more detail with the Guardian’s Andrew Sparrow on the politics live blog:

With the ECB and the US Federal Reserve both looking to cut interest rates, what is the Bank of England up to? Not much, for the moment, appears to be the answer.

The Bank’s rate-setting monetary policy committee meets next week (ahead of Thursday’s announcement) but will stick to its “solitary policy path”, according to Martin Beck at Oxford Economics, a consultancy.

A 9-0 vote to hold rates steady is on the cards he says – with no change to its guidance that it will raise interest rates where other central bankers are reacting to a slowing global economy.

A new PM, a likely shift in fiscal policy and continued Brexit uncertainty give the MPC good cause to continue a wait-and-see approach and leave the possibility of tighter policy until well into 2020.

Amid further signs of dovishness from the US Fed and the European Central Bank, the monetary policy committee is likely to leave the BoE the odd one out among major central banks

And here are the CBI retail figures in chart form.

This is a percentage balance, so 42% of the surveyed retailers report a fall in sales compared to 26% who say sales have risen –giving a balance of -16%.

There are only 46 retailers in the survey, so these figures should be taken with a pinch of salt, but they represent a large proportion of total British retailing.

A quick currencies update: there’s not much happening.

The pound is basically flat against the euro (at about €1.12) and the US dollar (still below $1.25).

The euro is remaining within the range of today’s movement so far, slightly above the two-month lows hit earlier.

Another interesting intervention from Gerard Lyons, tipped by some to be a contender to be the next governor of the Bank of England.

Lyons – a former chief economist at Standard Chartered bank, and a rare Brexit-backing economist – has downplayed his chances of getting the nod for the job from the Treasury, but he has advised Boris Johnson on economics in the past, meaning his views could be a useful bellwether for the approach of the new administration.

Both Johnson and his new chancellor, Sajid Javid, have given signs that they might be willing to borrow more to fund increased spending and tax cuts for the higher paid. (David Cameron and George Osborne’s long-term economic plan™ (that insisted on the need for deficit reduction above all else) appears to be becoming something of an historical curiosity.)

“There is scope, in an environment where nominal GDP is rising, real interest rates are low, for the government to actually borrow more in a credible way,” Lyons told BBC radio in an interview, via Reuters.

As we have seen in recent years, the fiscal numbers have improved. And even though in the near term there will be some uncertainty associated with leaving the EU, I think there is more room for manoeuvre.

Here’s one of the consequences of Draghi’s “whatever it takes” monetary policy support: Germany’s Dax benchmark equity index has almost doubled during his time in office.

(It’s the ninth anniversary of the “whatever it takes” speech tomorrow – which took place in London’s Lancaster House. Look at the run of green in the second half of 2012.)

Could the Ifo survey have influenced the ECB’s monetary policy decision?

Jack Allen-Reynolds, senior Europe economist at Capital Economics, a consultancy, said:

We still suspect that the ECB will wait until September before cutting interest rates, but the chance of a cut today has increased.

The case for it to wait until September to cut interest rates remains fairly strong. By then, it will have Q2 GDP data and a new set of economic forecasts. But an interest rate cut this afternoon would not be a huge surprise.

He includes another useful chart showing why economists pay such close heed to the Ifo survey. Note how the Ifo line runs ahead of the GDP figures.

The European economic “omens aren’t great”, says Kit Juckes, chief global FX strategist at French investment bank Société Générale, and the ECB may struggle to come up with the power to stimulate ailing European industry.

In 2012 Mario Draghi famously promised to do “whatever it takes” to help the eurozone economy and preserve the euro, but the days of a policy “bazooka” in the form of quanititative easing bond buying are over, Juckes says:

In truth, the ECB is down to a couple of pea-shooters. The days of “whatever it takes” are long gone. Fiscal policy needs to engage. We’ll take our cue from the bond market, but I doubt that anything the ECB does/says provides much comfort.

A helpful chart here from Nadia Gharbi, an economist at Pictet Wealth Management:

Germany is looking at a structural decline in the performance of its powerhouse manufacturing industry, some economists are saying.

“Still no silver linings for the German economy,” says Carsten Brzeski, chief economist at ING Germany, the investment bank.

All in all, the German economy is currently at a dangerous crossroads. The powerful recession insurance, domestic demand, is crumbling. Against the background of constantly weakening sentiment, it is doubtful whether domestic demand could rebound without external support, i.e. fiscal stimulus or trade relief.

There are some punchy statements on a possible German recession coming through after the Ifo survey.

VP Bank analyst Thomas Gitzel, via Reuters, said:

The most important German economic indicator suggests that the German economy is heading towards a recession.

More Reuters from Ifo president Clemens Fuest: the German economy is navigating troubled waters and companies are less satisfied with their current business situation.

The Ifo sub-index for the manufacturing sector posted its biggest drop since February 2009 – the height of the financial crisis.

That echoes purchasing managers’ index data yesterday which also had economists talking of a recession risk.

It will be too late for the ECB’s interest rates decision, but the latest measure of German business confidence from the influential Ifo Institute shows that morale has sagged more than expected in July.

The closely followed measure fell to a reading of 95.7 – well below the consensus expectations of 97.1.

Given the barrage of economic data suggesting that the European economy is weakening, the Ifo survey was never going to be the tipping point, but it gives another reason for Mario Draghi to strike a dovish tone in the press conference later.

Boris Johnson is planning to set out his “priorities for government” in his first appearance as prime minister in the house of commons – at about 10:30am BST.

Perhaps he can shed some more light on what will be happening by 31 October, the Brexit deadline.

People in the UK are braced for the continued heatwave, but predicted temperatures of 39 degrees Celsius will be good news for one company: Unilever.

The consumer goods giant, which makes brands such as Ben & Jerry’s, Magnum and Popsicle ice creams, today reported that it was held back by the rain as it reported weaker than expected sales growth. It said:

Market growth in Europe and North America was held back by the impact of weather on ice cream sales.

At the other end of the scale to Nissan, Volkswagen has bucked the recent trend of struggling carmakers with a 30% jump in operating profits in the second quarter.

While sales fell, the German carmaker managed to increase its market share as it focused on SUVs, the increasingly popular vehicles which also happen to have higher profit margins.

Operating profit came in at €5.13bn (£4.6bn) for the quarter, up from €3.94bn in the same period last year.

In the first six months of the current financial year, the sales revenues of the Volkswagen Group grew by 4.9% to €125.2bn compared with the first half of 2018.

VW has gone through the wringer in recent years after its “dieselgate” scandal, in which it cheated in emissions tests. However, it has recently performed better than expected in a tough environment.

Frank Witter, the VW board member responsible for finance, said:

In the first half of the year, the Volkswagen Group performed very well in a generally weaker overall market. The development of sales revenue and profit in the first six months is gratifying. We also confirm our outlook for the Volkswagen Group for the year as a whole.

Meanwhile, Metro Bank’s shares are down by 16% after hitting a record low this morning following the resignation of founder Vernon Hill as chairman last night.

Metro Bank has been under the cosh in recent months after a mischaracterisation of loans was found by the Bank of England. That error was compounded by a response that raised questions over the governance of the lender.

Hill will still hold a non-executive director role at the company he founded in 2010.

Cobham shares have surged by 35% after the bid from private equity firm Advent.

The FTSE 100 has risen by 0.2% at the opening bell. Top risers include ITV for a second day and miner Anglo American – although neither has gained more than 2% in early trading.

Across Europe, the Euro Stoxx 600 is up by 0.6%, led by France’s Cac 40, up 0.7%, and Italy’s FTSE MIB, up by 0.35%. Germany’s Dax gained 0.4%.