So, no festive cheer from the ECB today. Simply a dose of downgraded economic forecasts, which might be even worse once the slide in the oil price feeds through to consumers.

As president Draghi heads off to swap presents and cards with the rest of the governing council (a lump of coal for Jens Weidmann?), let’s quickly recap the key points at the ECB Press Conference held today.

1) Not tonight, Mario. The European Central Bank has resisted launching a quantitative easing programme today, despite the weak eurozone economy.

Instead, the governing council has decided to reasses the impact of its existing monetary stimulus measures in early 2015. It could potentially change “the size, the pace and the composition of our measures.”

So, we’re a step closer to QE in the eurozone – but not there yet.

Draghi told reporters that the ECB needs time to assess the impact of the tumbling oil price:

“The changes that have taken place in the price of oil are so meaningful — just think that between June and today, the price of oil decreased by 30 percent in euro terms — they need careful assessment …

We have to assess the direct effect, the indirect effect and whether there are going be second-round effects”

2) Cracks are appearing in the governing council….

The ECB has hardened up its desire to expand its balance sheet back to 2012 levels – taking it from €2trillion today back to €3trillion. But that decision was not unanimous; even some members of the executive council refused to back Draghi, he revealed.

“Yes indeed, ‘intended’ is different from ‘expected’. It’s not simply an expectation, it’s an intention, it’s not yet a target, it’s something in between. It was the vast majority of the members of the Governing Council, but obviously it was not unanimous.”

3) ….But that might not stop QE. Draghi insisted that the ECB could launch a new stimulus package without unanimity:

“It’s an important monetary policy measure, it can be designed, I believe, to have consensus. But we have to remember that we have a mandate, and as I said before, we don’t tolerate prolonged deviations from our mandate.”

Draghi also rejected the notion that European treaties barred the ECB from buying government debt.

4) Anything but gold. The governing council considered a wide range of quantitative easing options, Draghi said. The only asset they didn’t talk about was gold.

5) Europe’s economy needs help. The ECB has cut its growth and inflation forecasts again. It now expects inflation to be just 1.6% in 2016, below target — and that was before the oil price slide.

It also cut its growth forecast for 2014 to just 0.8%, rising slightly to 1% in 2015 and 1.5% in 2016. That’s down from 0.9% in 2014, 1.6% in 2015 and 1.9% in 2016 in the previous forecasts, three months ago.

Draghi said the risks to the economic outlook remain on the downside:

“In particular, the weak euro area growth momentum, along with high geopolitical risks, has the potential to dampen confidence and especially private investment.”

Source: The Guardian