ECB to hold rates at record highs
Likely to cut 2024 inflation, GDP forecasts
Lagarde seen pushing back against rate cut bets
End of bond buys may be brought forward

FRANKFURT, Dec 14 Reuters The European Central Bank faces a difficult balancing act on Thursday as it likely slashes its forecasts for growth and inflation while trying to temper speculation about imminent interest rate cuts.

The ECB is certain to leave borrowing costs at record highs, with the only possible policy change relating to the end of its last surviving bondbuying scheme a legacy of the COVID19 pandemic.

But the central bank39;s last meeting of the year will be anything but dull, with President Christine Lagarde under pressure to defend or ditch her guidance that rates will stay where they are for the next couple of quarters.

Investor expectations point to a first rate cut in the spring, which may make the ECB the first major central bank to reverse course after a global, concerted effort to bring down inflation since mid2022.

Lagarde is likely to push back against ratecut bets after it took the ECB a year and a half, and 10 straight hikes, to steer inflation onto a convincing downward path.

We expect the ECB to acknowledge that inflation has declined more rapidly than expected but to be coy about declaring victory prematurely, Deutsche Bank economists said.

The Federal Reserve signalled late on Wednesday that lower borrowing costs are coming next year, with policymakers indicating up…