Analysis-ECB seen struggling to keep market on side after mixed messages

By Francesco Canepa and Balazs Koranyi FRANKFURT (Reuters) - The European Central Bank's policy signals don't seem to convince investors any more, analysts say, whether

it is trying to raise their expectations for interest rates or lower them. Two years of tumult since economies began reopening after COVID have complicated central banks'

communications with financial markets, which help transmit policy moves to businesses and households. With inflation at multi-decade highs and war in Ukraine feeding

economic volatility, global peers including the U.S. Federal Reserve and Bank of Japan have often struggled to send clear and consistent signals. But four analysts told

Reuters that the ECB's problems doing so have been more acute because of frequent changes to its policy message and what one described as a cacophony of voices among policymakers

from the 20 countries that use the euro. "They are simply not consistent in their communication and explaining their reaction function," Carsten Brzeski, global head of

macro at Dutch bank ING, said. "The message keeps changing. This is why markets gave up on them." Just over a year ago, ECB President Christine Lagarde was trying

to persuade investors they were wrong to bet on rising borrowing costs because high inflation would prove transitory. By early February - even before Russia invaded Ukraine

- she had acknowledged mounting inflation risks and the possibility of an interest rate rise. Now, Lagarde has the opposite problem: investors won't believe her when she

says the ECB will keep raising rates at a brisk pace to bring inflation down to 2% within two years from nearly five times that level now.