The European Central Bank is set to leave interest rates unchanged on Thursday as inflation remains in line with its target, but a fraught trade and political outlook means it will keep alive the prospect of further easing.

The ECB halved its key rate to 2% in the year to June but has been on hold ever since, arguing that the 20-country euro zone economy is in a "good place", even if more easing cannot be ruled out.

Data over the summer has only confirmed this sanguine view, giving policymakers time to understand how U.S. tariffs, higher German government spending and political turmoil in France might impact growth and inflation.

This makes it likely that ECB President Christine Lagarde will once again aim to be "deliberately uninformative" about the future path of interest rates - as in July, when she batted back every question on the way forward.

But Lagarde is unlikely to close the door on further rate cuts, especially since inflation is projected to temporarily dip below the ECB's 2% target next year, keeping alive market bets that a final "insurance" cut could come around the turn of the year.

"The risk of a more persistent inflation undershooting - which might become evident in December, when the ECB will be forecasting out to 2028 - suggests a dovish bias," HSBC analysts said in a note.

In any case, the debate is at the margins and focuses on just a single rate cut, indicating that the ECB is done with the bulk of changes to monetary policy and rates are likely to stay around this level for an extended period.

Investors see a 50-60% chance of one last cut by next spring, even as they expect the U.S. Federal Reserve to ease six times by the end of next year.

The ECB will announce its decision at 1215 GMT, followed by Lagarde's 1245 GMT news conference.