Last week’s dreadful data for the eurozone tell us that a long period of low economic growth and excessively low inflation lies ahead. France is falling back into recession; the signs of recovery in Italy have disappeared – again; even Germany has lost momentum.

What should the European Central Bank do now? It could, and probably should, cut interest rates again. The eurozone needs all the help it can get, but an additional cut will probably not be sufficient. We are in a situation of diminishing marginal returns. The main significance of rate cuts these days are their impact on forward rates – money market rates ranging from a duration of one week to one year. A cut in the main interest rate, together with policies to supply unlimited liquidity at those rates, would probably nudge forward rates down further. But if Mario Draghi, the ECB president, wants to make a real difference, he should contemplate quantitative easing.

There are three reasons why he should now look beyond the conventional. The first is, of course, the economic outlook, and the associated downside risk on inflation. When German commentators such as Hans-Werner Sinn criticise the ECB’s decision to cut rates they never discuss the decision in connection with the inflation target – which should be the primary benchmark. The current inflation rate of 0.7 per cent is below target, and forecasts tell us that it will remain so for at least two years.