Our central scenario still has the ECB holding its deposit rate at 3.5 per cent in October and cutting to 3.25 per cent in December, but we have recalibrated the probability of back-to-back cuts in light of recent policymaker comments suggesting that the chance of additional easing is higher.

The fashionable idea that the world economy has arrived in a new more inflationary regime post-pandemic may ring hollow in Switzerland - one small vignette questioning how durably things have changed for the world's big central banks.

With inflation subsiding, the European Central Bank is expected to cut interest rates again on Thursday to prop up tepid growth with lower borrowing costs for companies and home buyers. The U.S. Federal Reserve likely won't be far behind in joining the rate-cutting process.