ECB to hold rates and take baby steps towards first cut

The headquarters of the ECB is seen in Frankfurt, Germany. — AFP

FRANKFURT: The European Central Bank is set to keep interest rates at record highs on Thursday and take baby steps towards cutting them in the coming months as inflation continues to fall despite stubbornly high underlying price pressures.

Having reacted too slowly to a sudden surge in prices two years ago, the central bank for the 20 countries sharing the euro is now reluctant to declare victory over the most brutal bout of inflation in decades.