The European Central Bank (ECB) is likely to hold rates at 3.75 per cent at its meeting in Dublin Castle today and prepare for an interest rate rise in June.
A flow of solid economic data and concerns about future inflation mean there are few reasons for ECB President Jean-Claude Trichet to hike rates, which are forecast to rise to 4 per cent in June.
Instead Mr Trichet is likely to refer to the need for "strong vigilance" on inflation at the 1.30pm news conference - the ECB's now-standard way of signalling an interest rate rise is due the next month.
The ECB's interest rate announcement at 12.45pm will be the third from a major central bank in under 18 hours, after the US Federal Reserve late last night and the Bank of England at midday today.
In contrast to the United States' slow down and Britain's inflation worries, the euro zone economic outlook looks rosy at first glance.
Inflation has been running below 2 per cent and in line with the ECB's price stability goal for the past eight months.
Business confidence remains high and the European Commission has just raised its euro zone growth forecast to 2.6 per cent for 2007 and 2.5 per cent for 2008 - above the bloc's recent trend.
Nonetheless, the ECB is worried inflation will rise back above 2 per cent towards the end of the year as spare capacity starts to run out and past oil price falls cease to flatter the statistics. Moreover, it is still unclear if European consumers will pick up the slack from a slowing US economy.