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From financial forecasters to the International Monetary Fund, calls for the European Central Bank to do more to support the euro zone recovery are growing louder.
With inflation well below the ECB’s 2 percent target ceiling and continuing to fall, 20 of 53 economists in a Reuters Poll conducted last week said the bank was wrong to leave policy unchanged at recent meetings and should do more when it meets on Thursday.
And the pressure on the ECB to do more has mounted after the preliminary inflation estimate for March was published on Monday. The data showed inflation cooling down further to 0.5 percent, its lowest since November 2009.
The IMF’s top European official expressed worry over low inflation and said there was more room for further ECB easing after the March preliminary inflation data released.
Euro zone inflation has dipped again and some forecasters are hedging their bets on the policy response by saying the European Central Bank could either cut rates this week or sometime in the next two months.
That lack of conviction, although not a recent phenomenon, is driven by memory of the ECB's surprise cut in November after a similar drop in inflation and a nagging belief that things have not worsened enough in the interim to warrant another.
Euro zone policymakers like to talk. They often contradict each other at separate speaking engagements on the same day. But they have struck a chorus in recent weeks, asserting that deflation is not a threat.
Members of the ECB Governing Council have been particularly vocal, insisting they will not have to alter policy to counter falling prices.