Most economists expect the European Central Bank to enter a rate-cutting cycle in March next year.

　　The European Central Bank's insistence that interest rates will remain at this level for a long time after the current rate rise peaks has ensured that inflation falls back to the central bank's target. However, economists believe this is unlikely, and they expect the peak rate to be fixed for a maximum of six months.

　　In September, most economists expect the ECB to complete the final increase in this round of tightening, taking rates to 4.0 per cent, according to a Bloomberg survey. Then, in March of next year, the rate will start to fall to between 2% and 4% by the end of 2024.

　　The divergence suggests that after 400 basis points of interest rate hikes since July last year, the adverse effects of ultra-high rates are about to kick in and will eventually force the central bank to cut rates if it misses its inflation target.

　　Christian Todman, an economist at Dekabank, said: "The ECB must find reasons to stop raising rates in the near future, while maintaining a credible tightening bias. I expect rates to peak this month and stay there until September next year. The risk is that markets interpret this pause as a sign that a rate cut is coming."

　　David Powell, an economist at Bloomberg Economics, said: "While we don't expect ECB President Christine Lagarde to offer much guidance on when the pause will come, she does seem focused on making a clear announcement that the ECB is unlikely to cut rates any time soon."

　　Andrzej Szczepaniak of Nomura Securities believes that with next week's move looking assured, the big question is whether the ECB will commit to a rate hike again in advance at its next meeting. "If it does, market pricing is likely to settle in October, as data is expected to be largely unchanged between the September and October meetings," he said.

　　Ulrike Carstens, an economist at DWS Investment Management, said: "I don't think Lagarde will give any indication on the outlook for the September meeting. They emphasize data dependency and wait for data before the meeting."

　　Carsten Brzeski, global head of macro at ING, said: "The July meeting is a no-brainer: a 25 basis point rate hike, leaving the door open for another hike in September. But it gave no guidance on when and where the final rate would be reached. So maybe the only challenge is to insist that silence is golden."