The ECB is expected to cut interest rates for the second consecutive meeting, accelerating the rate cut due to data showing rapid decline in inflation and worsening economy in the eurozone.

Analysts surveyed by Bloomberg unanimously predict that the ECB will further cut the deposit rate by 25 basis points to 3.25% on Thursday, just five weeks after the last rate cut.

The eurozone inflation rate has fallen below 2% for the first time since 2021, with dimmer economic prospects expected to prompt the ECB to accelerate the pace of interest rate cuts, previously thought to be on a quarterly basis. Meanwhile, numerous risk factors abound, from the Fed's easing cycle to the US election results, and the volatile situation in the Middle East.

"The ECB's focus has shifted from high inflation to weak growth," said Paul Hollingsworth, Chief European Economist at BNP Paribas. "From a risk management perspective, it is entirely reasonable to accelerate the easing steps, even though a high degree of uncertainty still requires us to exercise caution."

The ECB will release its policy statement at 14:15 local time, with President Lagarde holding a press conference in Brdo, Slovenia, 30 minutes later.

ECB policymakers hinted in September that the third rate cut of this easing cycle may not occur until the last meeting of the year in December. The latest economic growth and inflation forecasts, including the first forecast for 2027, will be published at that time.

But recent s&p global purchasing managers' index data shows a decline in private sector output, and Germany faces the risk of a second consecutive year of economic contraction. Investors and analysts are starting to bet on a rate cut by the central bank this month, followed by further actions.

"The PMI data undoubtedly tilts the balance towards a rate cut in October," said Michala Marcussen, chief economist of France's industrial bank.

Many officials have directly or indirectly acknowledged this expectation. Lagarde stated that the upcoming meeting will take into account factors such as having more confidence in inflation returning to target on time. European Central Bank committee member Francois Villeroy de Galhau said the central bank is "very likely" to cut rates in October.