The European Central Bank (ECB) and the Bank of England will announce their latest policy decisions on Thursday.
While analysts expect the ECB will keep its policy and interest rates unchanged the monetary authority has come under mounting pressure to tackle falling prices.
ECB President Mario Draghi described December's 0.8% consumer price inflation reading as a "one-off" event but an unexpected further slide to 0.7% the next month prompted some experts to anticipate the central bank would make a move.
The ECB is targetting inflation of close to but under 2%.
Credit Suisse yesterday said it expects euro-area inflation to fall further and sees the ECB taking the deposit rate marginally into negative territory and cutting its main policy rate in March or April.
However, the broker said the possibility that it would bring forward the decision to this Thursday's policy meeting is a risk.
"We expect headline and core to hit a new low in March at 0.4% year-on-year. 2014 inflation is likely to be well below the ECB December staff projections, and prospects for the medium term have also weakened in our view," the broker said.
ECB members are apparently showing "varying degrees of concern" about the threat of deflation in the Eurozone that could alter its current monetary policy stance, according to MNI sources.
The BoE is also expected to keep its interest rates unchanged at 0.5%. The central bank has vowed to maintain its benchmark rate at the record low at least until unemployment falls to 7%.
However, a faster than expected drop to 7.1% in January put pressure on the BoE's Governor Mark Carney to change his forward guidance.
The BoE is also predicted to maintain quantitative easing at £375bn.
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