France’s inflation rate fell to its lowest level in four years, taking it further below the European Central Bank’s target and priming the bank for a fresh cut to interest rates next week. Consumer prices in the country rose 0.

The European Central Bank has room to cut its interest rates further if inflation eases to its 2% goal this year as it expects, ECB policymaker Joachim Nagel said on Tuesday, adding the outlook for prices was "encouraging".

The European Central Bank is getting closer to a pause in interest cuts since it is no longer clear that policy remains restrictive and energy price surges raise inflation risks, ECB board member Isabel Schnabel has said.

The European Central Bank will trim its deposit rate again next week to 2.50%, according to all 82 economists polled by Reuters who expected two further cuts by the middle of this year.

The ECB lowered borrowing costs for the fourth straight time last week and hinted at even more policy easing since inflation could be back at its 2% goal by late summer, economic growth is anaemic and a trade war was a distinct possibility.

Economists have added a big disclaimer to their view that the European Central Bank will cut interest rates three more times: Donald Trump.

Euro zone inflation prospects improved while growth remained anaemic, fresh data showed on Friday, solidifying the case for further ECB rate cuts to stimulate an economy that has been stagnant for nearly two years.