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The prospect of an effective vaccine against COVID-19 is a source of relief but the euro zone is still set to suffer from new curbs on economic activity to combat a rise in infections, two European Central Bank policy-makers said on Friday.

Spanish central bank governor Pablo Hernandez de Cos and ECB board member Isabel Schnabel were echoing a cautious tone from President Christine Lagarde a day earlier, cementing expectations for fresh stimulus in December.

“The vaccine is very positive news, regarding investor confidence, consumers confidence and economic activity. But I would like to be cautious. In the short term, restrictions will continue across Europe,” de Cos said.

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Pfizer said on Monday its experimental COVID-19 vaccine was more than 90 per cent effective based on initial trial results, sending its shares higher along with the broader markets. In a TV interview with CNBC, Schnabel also said the vaccine was “excellent news” but noted new restrictions “dampened substantially, the outlook for the fourth quarter, and then also for the first quarter of next year.”

Schnabel said the vaccine “puts us back in our baseline scenario,” which sees the economy fall by 8.0 per cent in 2020 and to rebound by 5.0 per cent in 2021 and by 3.2 per cent in 2022, while de Cos said the second wave had effects that “were not factored” into those forecasts.

The ECB said last month it would announce a new stimulus package in December and Lagarde added earlier this week this would mainly be based on fresh emergency bond purchases and subsidies to banks via loans at negative interest rates.

But Schnabel argued the situation had changed since the first wave of the pandemic in March and the ECB had to discuss the “intensity” of its asset purchases, a possible hint at a lower pace of buying.

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