The European Central Bank (ECB) is expected to announce later on Thursday that it is keeping eurozone interest rates on hold at 3.25% for November.
The European Central Bank (ECB) has voted to keep eurozone interest rates on hold at 3.25% for November, a decision that was widely expected.
Yet analysts also agree the ECB's accompanying statements will prepare the way for a rise in December.
Analysts now expect the ECB will raise rates by one quarter of a percentage point in December, as it continues to keep a close eye on inflation.
Despite figures showing this week that eurozone inflation fell to 1.6% in October, the ECB has already hinted that further rate rises are likely.
Although eurozone inflation fell in October to 1.6%, the ECB has already hinted further rate rises are needed.
It is said to be concerned that lower oil costs could refuel inflation.
It is said to be concerned that lower oil costs could refuel inflation.
'Difficult decisions'
The ECB's governing council raised interest rates by one-quarter of a percentage point last month, vowing to remain "strongly vigilant" on price inflation.
It has set an inflation target of 2% or below.
December's expected one-quarter of a percentage point rise to 3.5% would be the sixth increase in eurozone rates during 2006.
Lehman Brothers economist Sandra Petcov said the ECB faced some tough decisions on interest rates.
"It's becoming increasingly difficult for them," she said.
"It was much more obvious where rates needed to go when they were lower, but the closer you get to whatever the neutral level may be, the less clear the situation becomes."
