Frankfurt - Falling inflation and a deepening recession is likely to pave the way for the European Central Bank (ECB) to deliver another hefty rate cut Thursday, trimming borrowings costs to an historic low of 1 per cent.

Thursday's widely forecast 50-basis-point reduction in the cost of money in the 16-member eurozone will bring the total rate cuts made by the ECB since October to 325 basis points reflecting its effort to spur economic growth.

The predicted ECB rate cut - its sixth since October - will also coincide with Thursday's Group of 20 (G20) big world economies summit in London, which is aimed at bolstering global economic confidence and revamping world financial rules.

Going forward, however, economists are divided on whether borrowing costs at 1 per cent will bring the ECB's current rate-cutting cycle to an end or if the bank will continue easing monetary policy.

But the scale of the downturn has meant that central banks around the world believe they can no longer rely solely on interest rates and have been forced to revert to so-called unconventional measures to combat the global recession.

Having effectively rejected the ECB moving to a zero interest rate regime, bank chief Jean-Claude Trichet has indicated that the Frankfurt-based ECB has been considering unconventional measures.

This could possibly include implementing a so-called quantitative easing policy, which is effectively printing money.

Many analysts, however, believe that it could still take a while before the ECB follows the world's other leading central banks - the US Federal Reserve, the Bank of Japan and the Bank of England - and takes steps to boost the money supply as part of moves to underpin economic activity.

Along with the refinancing rate, the ECB is predicted to trim on Thursday by 25 basis points its deposit rate, which it pays on amounts held at the central bank overnight. This would bring the deposit rate down to 0.25 per cent, after the bank cut the facility last month to 0.5 per cent. (dpa)