European Central Bank policymakers hailed victory over runaway inflation on Friday even as some warned that it was now at risk of going too low, rekindling memories of anaemic price growth in the pre-pandemic decade.

Traders are increasingly confident the European Central Bank will pause its run of interest rate cuts now that the central bank sees itself as well-positioned to deal with global economic uncertainty

Eurozone inflation fell to 1.9% in May, below forecasts, boosting expectations of an ECB rate cut on Thursday. Core inflation also eased to 2.4%. The euro slipped and bond yields fell as markets priced in a 25bp rate cut to 2.