The ECB’s Governing Council will meet in Frankfurt today to consider whether to make any changes to interest rates.
No adjustments are expected though, despite some progress being made in bringing the inflation rate down across Europe.
The rate at which prices are rising in the eurozone had been coming down for months, but reaccelerated to 2.9% in December.
Here in Ireland, the annual rate of inflation rose to 4.6% in December, compared to 3.9% in the 12 months to November.
If no changes are made at today’s gathering of central bankers, it would be the third meeting in a row that rates will have remained the same.
The ECB’s benchmark rate has not been changed since September of last year, when it was increased to 4%.
Last week, the ECB president Christine Lagarde said rates had likely reached their peak.
But she also said that it was too soon to “shout victory” on inflation, because of economic uncertainties and the possible impact of rising wages on price pressures.
Markets are betting on the possibility of rates beginning to fall as early as April.
But Ms Lagarde has signalled borrowing costs would likely only start coming down in the summer and if the latest economic data supported such a move.
Policy makers remain concerned that tensions in the Middle East and supply chain delays in the Red Sea could put upward pressure on prices and downward pressure on economic growth.
The euro zone economy shrank by 0.1% in the third quarter of 2023 and analysts are fearful that this trend will continue in the final three months of the year.