ECB to weigh new stimulus early next year

FRANKFURT, Germany - European Central Bank head Mario Draghi says the bank has "stepped up" preparations for launching new stimulus measures -- but expects to make a decision on any new steps "early next year."

Draghi didn't unveil further stimulus on Thursday after the bank left its benchmark interest rate unchanged at 0.05 percent. The rate decision was expected as the bank says the benchmark is so low it cannot be reduced further.

Draghi said the ECB will reassess early next year the success of its existing stimulus programs and the impact of weak oil prices on the eurozone economy.

ECB staff "have stepped up the technical preparations for further measures, which could, if needed, be implemented in a timely manner," Draghi said.

That's a hint that the bank could pursue large-scale purchases of government bonds, a step which involves pushing newly created money into the economy to raise growth and inflation. The policy, known as quantitative easing, or QE, has been used by the U.S. Federal Reserve, Bank of England and Bank of Japan.

The euro was barely affected by Draghi's statement as its tone was widely anticipated - it was up 0.2 percent at $1.2332.

The ECB is trying to raise dangerously low inflation -- a token of weak demand in the economy. It lowered its inflation outlook for next year to 0.7 percent from a 1.1 percent forecast made in September.

While the bank took no action Draghi added some tough rhetoric. "We won't tolerate prolonged deviations from price stability," he said.