London, Dec 10 (IANS): The Western world’s largest central banks are poised to keep interest rates on hold this week amid concerns over stubbornly high inflation, despite growing expectations for sharp cuts in borrowing costs next year, a British daily newspaper reported.

In a crunch week for the global economy, the US Federal Reserve, Bank of England (BoE) and European Central Bank are expected to keep interest rates at their current restrictively high levels to ensure inflation continues to fall back from the highest levels in decades, The Guardian reported.

However, financial markets expect interest rates to be cut next year amid cooling inflation and as high borrowing costs weigh on economic growth, raising the prospect of recessions on both sides of the Atlantic before key elections, the report said.

"Their core message is likely to be similar. Good progress has been made towards reducing inflation, but they cannot afford to be complacent," said Raphael Olszyna-Marzys, an international economist at J Safra Sarasin Sustainable Asset Management.

Trading in financial markets reflects the probability of up to 1.4 percentage points of cuts by the Fed and the ECB by the end of 2024, according to the investment bank Nomura, while expectations have intensified for the BoE to cut rates by nearly one percentage point, the British daily reported.