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(Bloomberg) -- The European Central Bank will keep interest rates steady on Thursday, preferring to await further proof of progress on inflation before adding to June’s initial cut.

The deposit rate will be left at 3.75%, according to all 55 economists surveyed by Bloomberg. No concrete guidance is expected on the path ahead for borrowing costs, with a slew of crucial data only due in the weeks ahead.

That’s fixing attention on the next meeting, in September, when economists reckon officials will deliver a second quarter-point reduction after digesting two more monthly inflation reports and releases on wages and productivity.

There may also be more clarity by then on the political upheaval in France and the US, and on when the Federal Reserve’s own monetary easing will kick off.

Investors will be closely watching President Christine Lagarde for signals that a resumption in loosening is possible in the euro zone in the autumn. She’ll address journalists at 2:45 p.m. in Frankfurt — 30 minutes after the ECB’s policy announcement.

Interest Rates

Most analysts predict two more quarter-point rate cuts this year — in September and December — though a small group sees just one. Markets are taking a similar view, fully pricing one and leaning strongly toward another.

Policymakers have clearly signaled that their July gathering is — primarily — an opportunity to take stock. Chief Economist Philip Lane told Bloomberg Television that the debate will focus on economic issues. He also said data available at the meeting won’t answer all the lingering questions.

Lagarde herself has fed speculation that officials will lower rates every quarter, as they receive updated projections. “We need a lot of data — I’m not sure that we are getting those data at every single monetary-policy Governing Council meeting that we have,” she said after the ECB’s annual conference in Sintra, Portugal.

Wages and Profits

For inflation to return to 2% as planned, the ECB is relying on wage growth to moderate, profit margins to shrink and productivity to increase — a complex interplay that may not pan out as anticipated.

What Bloomberg Economics Says...

“The recent increases in compensation per employee, the ECB’s official time series on negotiated wages and services inflation have left the Governing Council reluctant to cut again without more data confirming that cost pressures are easing. That should cause it to keep rates steady in July, but slowdowns should help unlock another move in September.”

—David Powell, senior euro-area economist. Read more here

Domestic price pressures, in particular, remain firm — underpinned by healthy demand for services and a robust labor market. In Germany, the region’s largest economy, unions are still pushing for outsized gains to make up for past inflation, and have mostly succeeded so far.

Evidence of their achievements in the second quarter will arrive in the weeks before the ECB’s September meeting, when policymakers will also receive fresh forecasts for economic expansion and inflation in the 20-nation euro zone.

Risks and Uncertainty

Some recent indicators signal that the bloc’s recovery may have lost a little steam. Manufacturing has suffered yet another blow, the services sector has slowed and confidence has faded due to heightened uncertainty.

Even before the attempt on former President Donald Trump’s life, analysts viewed US elections in November as the biggest risk to the euro-area economy. His chances of returning to the White House now appear to have improved, especially as Democrats face calls for Joe Biden to give way to a younger candidate.

More risks lurk closer to home. Snap elections in Lagarde’s homeland of France initially sparked fears of a government led by the far left or right, but eventually produced a parliament that looks unable to address the fiscal challenges facing the region’s No. 2 economy.

While markets have calmed down, the episode recalled Europe’s debt crisis last decade and caused concern in Italy, whose own public finances are under the microscope.

Policymakers say investor reactions haven’t been unwarranted or disorderly — pushing back against speculation that their two-year-old backstop to defend against such turbulence may be called into action. They’ve also expressed dismay at German Finance Minister Christian Lindner for questioning the tool’s legality.

New turmoil may loom, however, should governments fail to rein in budget deficits or bungle efforts to raise productivity.

--With assistance from Joel Rinneby and Barbara Sladkowska.