ECB set to act against low inflation, hold fire on bolder steps

The European Central Bank is expected to hold off on cutting interest rates on Thursday, opting instead to loosen lending conditions to fight off the danger of debilitating low inflation. A slight upward surprise in euro zone inflation in February and initial signs of life in some economies in the region have eased pressure on the ECB to take radical steps. But with inflation running in the ECB's "danger zone" below 1 percent - 0.8 percent at last count - the bank is poised to open some money spigots by ending operations to drain funds from the financial system. The ECB currently "sterilizes" money it puts into the system though bond purchases by withdrawing other money to offset the effect.

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