Signs are emerging that the European Central Bank will soon cut eurozone interest rates again, as plummeting growth prospects and tumbling inflation clear the way for a sustained loosening of monetary policy.

Little more than two weeks after it slashed its main policy rate by half a percentage point to 3.75 per cent as part of co-ordinated global central bank action, policymakers at the notoriously inflation-sensitive ECB are making bolder signals that further reductions are possible.