Finally, Britain’s FTSE 100 has closed just 2 points lower at 6877.

Germany’s Dax also closed flat, while Italy’s FTSE MIB finished the day 0.5% higher, after Rome agreed to cut spending plans to satisfy the EU.

Goodnight!

Here’s Patrice Gautry, Chief Economist at Union Bancaire Privée (UBP), on today’s European Central Bank press conference:

“The ECB is looking at an increasingly risky environment and is forecasting sluggish growth (under 2%) in the coming years, along with persistently sub-2% inflation until 2021. However, it is winding up its quantitative easing programme, as previously announced. It came as no surprise that the ECB is relying on reinvestment inflows into fixed-income assets (with no end date scheduled) to continue to provide sufficient liquidity.

“Risk analysis is beginning to become less favourable but the sources of concern are believed to be temporary, or at least not enough of a concern to worry the ECB so much that it might have to review its scheduled interest-rate hike after Q3 if all goes well. The ECB is clearly not as relaxed as it would like to be, but it does not want to continue its asset-purchase programme, as it is also expecting regular rises in underlying prices and is setting out a tighter job market scenario and rising wages.

Stewart Robertson, senior economist at Aviva Investors, says the EBC has concerns about the growth slowdown and fears inflation will return only very gradually.

“Once again, they had to revise down their growth projections for the Eurozone. GDP is now expected to increase by 1.7% in 2019. The downward revision is modest - just 0.1% - but it comes after a succession of earlier revisions in the same direction. Inflation is also projected lower - (1.6% from 1.7% in 2019).

ECB President Draghi remained as upbeat as he could and continued to insist that risks to the growth outlook were “balanced”, despite acknowledging that recent data had been “somewhat weaker than expected”.

Last question.

Q: Last week in France, thousands of people took to the streets to express their anger. So how can central bankers provide answers to those people?

Draghi starts by expressing the ECB’s condolences to those who were hit in the terrorist attack in Strasbourg this week.

But on the yellow vest protests, Draghi doesn’t say much, beyond condemning the violence that gripped Paris, saying:

We blame and condemn violence, but the right to protest is part of our democracies.

I’m confident that the French government will address this problem in the best way.

That’s the end of the ECB press conference.

Asked about the 20th anniversary of the euro, Draghi says he would like to see “candid, close introspection that could inspire future action on completing the monetary union”.

Q: Is QE now a permanent part of your toolbox?

Yes, Draghi replies, adding that this brings the ECB into line with other major central banks.

News about trade seems to be slightly better, says Draghi. But he won’t give a list of improvement, because next time he’ll have to list everything that’s got worse...

He then cites “Brexit” and “other geopolitical events”. They have increased general uncertainty, that affects confidence, and a decrease in confidence certainly hurts business investment, Draghi continues.

Asked about eurozone banking union, Mario Draghi says we must be “alert and humble”.

Alert because there is more to do:

Monetary union is not complete..... More needs to be done before we can declare victory and say banking union is complete.

And humble, because this is fundamentally a political issue. The ECB can only advise.

Mario Draghi is now explaining that the ECB is “monitoring carefully” whether the current record low interest rates are hurting bank profits.

Q: The financial markets seem more worried about the downside risks than the ECB. Some don’t expect an interest rate rise until 2020 - are they wrong?

Draghi argues that the markets “well understood our reaction function” -- meaning they helpfully ease financial conditions when growth weakens, helping growth to pick up again.

Q: Did any members want to set a time-limit on the re-investment of bonds purchased in the APP?

Our decision was unanimous, says Draghi (ie, no).

Q: You are ending QE four years after the US Federal Reserve, so are you concerned that you lack tools to fight the next downturn?

No, says Draghi, before immediately adding that the ECB is “always concerned”. But it does have instruments to combat any downturn.

Q: Did you discuss when you might start to raise interest rates?

No, says Draghi. Any decision will be ‘state-dependent’ and ‘time-dependent’ -- ie, not before next summer, and only when inflation is sustainably back on target.

Draghi declines to define “extended time” (the timegap before it will start unwinding its QE purchases).

The eurozone is facing “drivers of lower growth, but not low growth”, Draghi tap dances.....

Draghi is showing some fancy footwork...

Onto questions.

Q: What threats are the ECB governing council worried about in 2019?

Mario Draghi says the mood at this weeks meeting can be summed up as “continuing confidence, with increasing caution”.

He argues that the ECB isn’t wrapping up its asset-purchase programme, as it is holding onto all the bonds it has already bought [that’s true, but it also won’t be spending any money on new purchases....]

But he also reiterates that the economic picture has darkened a little, adding:

It’s been weaker for a while now.

Mario Draghi is ending his statement by urging eurozone governments to crack on with structural reforms, and to rebuild their fiscal buffers.

He says this at every meeting, though, which implies that politicians aren’t listening....

Headline inflation is likely to decrease in coming months, Draghi adds, in another dovish signal...

Draghi sounds more like someone launching a stimulus programme, rather than one dropping anchor....

Draghi tells reporters that incoming economic data has been weaker than expected, due to softer external demand (perhaps due to the US-China trade dispute??)

However, the “underlying strength” of domestic demand is underpinning the eurozone’s expansion, he says.

Draghi adds that there are still “prominent uncertainties” (Brexit and trade wars, perhaps?), thus a “significant monetary stimulus” is still needed.

President Mario Draghi begins by reading out today’s statement, confirming that the ECB has left interest rates on hold (as expected) and halted buying new bonds under its asset purchase programme.

The ECB is slamming the brakes on QE even though eurozone growth slowed to just 0.2% in the last quarter.

Christian Jaccarini, senior economist at Centre for Economics and Business Research, says investors are worried about the state of the euro economy....

With Eurozone stability remaining under threat from the slowing growth and heightened political unrest, the ECB’s Governing Council was keen to remain supportive as it announced the end of quantitative easing today.

The move to end QE was almost inevitable given the ECB’s credibility was at stake. Still, while clear statements on the prolonged use of reinvestments and low interest rates will provide some reassurances for investors, the backdrop for the announcements will remain concerning for many.”

Here’s some early reaction to the ECB’s decision to stop stimulating the eurozone economy by buying government bonds with newly-minted money:

Mike Ashley’s gloomy warning has triggered a sell-off across the retail sector.

Marks & Spencer’s shares have slumped by 4%, Next are down 3.3%, and Kingfisher (which owns DIY chain B&Q) are down 2%.

Here’s my colleague Angela Monaghan on Mike Ashley’s Debenhams broadside:

Sports Direct boss Mike Ashley has launched an extraordinary attack on Debenham’s after the department store chain refused his offer of a £40m cash injection despite “the worst November for retailers in living memory”.

In a letter addressed to the Debenhams chief executive, Sergio Bucher, Ashley urged the board to reconsider the offer from Sports Direct, which is Debenhams’ largest shareholder.

Debenham’s has responded, saying that Sports Direct’s offer of a £40m loan came with unacceptable strings attached.

Mike Ashley’s letter doesn’t reveal what these conditions are, but we understand he wants an additional 10% of Debenhams shares (taking SPD’s stake to nearly 40%).

Mike Ashley isn’t the only retailer warning that trading conditions are tough.

Clothing retailer Bonmarche hit investors with a profits warning this morning, and warned that:

The current trading conditions are unprecedented in our experience and are significantly worse even than during the recession of 2008 to 2009.

Here’s retail expert Patrick O’Brien:

Mike Ashley’s blistering missive, urging Debenhams to take his money (on loan), has shaken up the retail sector.

Here’s some early reaction:

Debenhams shares have fallen by 3%, following Mike Ashley’s warning that the company may have “zero chance of survival” without taking financial help.

That takes them down to 5.5p, compared with 35p at the start of this year.

Sports Direct shares are taking a bigger hit, down by 9%. Obviously City traders aren’t encouraged to hear that November was such a dire month for the high street.

Mike Ashley is now laying into Debenhams on a conference call with analysts.

The call is to discuss Sports Direct’s financial results (it reported a 27% drop in profits, due to the cost of rescuing House of Fraser earlier this year).

Marcus Walker of the Wall Street Journal has a good take on the Italian budget.

He reckons Giuseppe Conte’s compromise isn’t enough to satisfy Brussels (which Pierre Moscovici confirmed this morning). So more spending cuts may be needed.

But any additional cuts risks fracturing the coalition between the right-wing League party (let by Matteo Salvani) and the anti-establishment Movement Five Star (led by Luigi Di Maio).

Italy’s budget u-turn means it must change two of its key pledges -- cutting the retirement age, and introducing a new basic income.

Reuters has the details:

Italy’s government will cut “a few billion” euros from its two key reforms in order to hit the new deficit target it proposed to the European Commission, deputy industry minister Dario Galli said on Thursday.

The ruling coalition on Wednesday offered to lower its deficit target for next year to 2.04% of gross domestic product from a previous 2.4% to avoid disciplinary action from the EU.

“A few billions (in savings) compared to the original theoretical forecasts will come from the realistic implementation of the (government’s) most relevant measures from a political point of view,” Galli told La7 broadcaster, referring to income support and the introduction of a lower retirement age.

European commissioner Pierre Moscovici has told the French Senate that “constructive talks” are underway with Italy over its economy and deficit situation.

However, there is still work to be done, he added (via Reuters).

But what about the Éléphant dans la chambre - France’s deficit?

Disappointingly, Moscovici said it was too early to comment on whether France might now breach EU budget rules, now the gilet jaune protesters have forced president Macron to raise the minimum wage and cancel a tax on pensions.

Over in Milan, Italian bank shares have jumped by over 3.2% in early trading.

That’s another thumbs-up from the financial markets for the new, lower, deficit target.

The main Italian stock index has jumped by 1%, and other European markets are also up this morning:

Italian two-year bonds are also rallying hard today.

The yield on this shorter-dated debt has dropped to 0.468%, the lowest since May - when the current Italian government was being formed.