The European Central Bank is all but certain to cut interest rates on Thursday and is likely to keep open the door to further policy easing as concerns over lacklustre economic growth supersede worries about persistent inflation.

Despite making similar moves in the recent past, the European Central Bank and the Federal Reserve are now at different junctures.

Despite US President Donald Trump's sabre-rattling, the European Central Bank is set to press on with interest rate cuts Thursday as officials increasingly voice confidence that the fight against inflation is on track.

The ECB is expected to drop its main lending rate from 3 per cent to 2.75 per cent, its fifth cut since last July.

Traders are betting the European Central Bank will have to adopt a more aggressive approach to cutting interest rates as the risk of US tariffs and political turmoil in the region weighs on the bloc’s economy.

Eurozone rate-setters are set to cut borrowing costs again this week, confident their efforts to lower inflation will remain on track despite the threat from US President Donald Trump's protectionist agenda.

The European Central Bank (ECB) will announce its interest rate decision on Thursday, with market expectations leaning towards a 25 basis point cut, bringing the policy rate down to 2.75% from 3.00%.