FRANKFURT: The European Central Bank will be in the full spotlight of financial markets on Thursday when it meets to decide if and how to strike against deflation stalking the 18-member eurozone.
With economic recovery flagging badly and inflation falling ever deeper into a danger zone, the big decision for the bank is whether to spell out if and when it will open its cash floodgates.
Many economists believe it will do so by means of what is known as "quantitative easing" or "QE", but that it will probably not put such a programme into effect immediately.
QE is a radical policy -- already used by other central banks such as the US Federal Reserve -- of buying securities on a big scale to inject cash into the economy.
The ECB has already cut its key interest rates to record lows and made huge volumes of ultra-cheap cash available to banks in a bid to kick-start lending in the single currency area.
But the pressure has increased on the ECB to take still more measures after eurozone inflation slowed to just 0.3 percent in August from 0.4 percent the previous month.
The latest data puts inflation worryingly below the central bank's target of just under 2.0 percent and brings the single currency area perilously close to deflation.
This is a climate of falling prices which can cause businesses and consumers to delay purchases, further reducing demand and prices and pushing up unemployment.
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