The European Central Bank is set to lower interest rates for a second straight meeting — quickening the speed of cutting after data showed that the rapid retreat in inflation is being accompanied by a deteriorating economy.

"The trends in the real economy and inflation support the case for lower rates," Holger Schmieding, an economist at Berenberg, said. A quarter-point cut on Thursday would lower the rate that the ECB pays on banks' deposits to 3.25% and money markets almost fully price in three further reductions through March 2025.

Economic growth in the 20 nations sharing the euro is slowing, and inflation has slowed to below the 2% target.