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ECB cuts key rate to tackle crisis

The European Central Bank (ECB) has cut its key interest rate by a quarter percentage point to 1.0% to help the eurozone economy as it slides towards recession because of the debt crisis.

The bank last cut rates only five weeks ago on November 3.

The cut was an aggressive move from new ECB head Mario Draghi, who took office on November 1.

Under predecessor Jean-Claude Trichet, the bank sometimes moved more slowly than markets wanted on rate cuts, and even raised rates twice earlier this year on concerns about inflation.

Mr Draghi has said the eurozone economy could be heading for a mild recession. The cut will promote economic growth and business optimism that policymakers are tackling the crisis.

A slowing economy would only make it harder for European governments to pay down debt.


From Belfast Telegraph