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| Version 1 | Version 2 |
|---|---|
| ECB reveals surprise stimulus moves | ECB reveals surprise stimulus moves |
| (35 minutes later) | |
| The European Central Bank has cut its benchmark interest rate to 0% from 0.05% as part of a package of measures intended to boost the flagging eurozone economy. | The European Central Bank has cut its benchmark interest rate to 0% from 0.05% as part of a package of measures intended to boost the flagging eurozone economy. |
| The ECB will also expand its quantitative easing programme from €60bn to €80bn a month. | The ECB will also expand its quantitative easing programme from €60bn to €80bn a month. |
| The scheme will now include the purchase of corporate bonds as well as government debt. | The scheme will now include the purchase of corporate bonds as well as government debt. |
| The bank has also decided to further cut the bank deposit rate. | The bank has also decided to further cut the bank deposit rate. |
| It now stands at minus 0.4%, down from minus 0.3%, meaning that banks must pay more to deposit funds with the ECB. | It now stands at minus 0.4%, down from minus 0.3%, meaning that banks must pay more to deposit funds with the ECB. |
| The package of measures, including the decision to cut the benchmark interest rate, was more radical than investors had expected. | The package of measures, including the decision to cut the benchmark interest rate, was more radical than investors had expected. |
| Thursday's action followed a stimulus package announced in December. | Thursday's action followed a stimulus package announced in December. |
| Bigger bazooka | Bigger bazooka |
| The euro fell 1% against the US dollar to $1.0863 and shed 0.5% against sterling, the yen and the Swiss franc. | The euro fell 1% against the US dollar to $1.0863 and shed 0.5% against sterling, the yen and the Swiss franc. |
| John Hardy, head of currency strategy at Saxo Bank, said: "This was a much bigger bazooka than the market was expecting and shows the ECB trying to get ahead of the confidence curve after learning its lesson in December." | John Hardy, head of currency strategy at Saxo Bank, said: "This was a much bigger bazooka than the market was expecting and shows the ECB trying to get ahead of the confidence curve after learning its lesson in December." |
| A weaker euro makes European exports cheaper and the fall bolstered European stock markets, with Frankfurt rising 2.2% and Paris jumping 2.5%. | A weaker euro makes European exports cheaper and the fall bolstered European stock markets, with Frankfurt rising 2.2% and Paris jumping 2.5%. |
| Shares in European banks also rose sharply, with Deutsche Bank rising 4.5%, Societe Generale adding 5.3%, Santander up 4.4% and Italy's UniCredit adding 6.8%. | Shares in European banks also rose sharply, with Deutsche Bank rising 4.5%, Societe Generale adding 5.3%, Santander up 4.4% and Italy's UniCredit adding 6.8%. |
| ECB president Mario Draghi will give a press conference in Frankfurt at 1330 GMT. | ECB president Mario Draghi will give a press conference in Frankfurt at 1330 GMT. |
| Analysis: Kamal Ahmed, economics editor | Analysis: Kamal Ahmed, economics editor |
| Mario Draghi will be now be watching to see if the ECB's actions have any effect on economic growth. | Mario Draghi will be now be watching to see if the ECB's actions have any effect on economic growth. |
| If they don't, the central bank has a major problem. As do the major European economies, held in a deflationary spiral by slowing growth, low global demand and crumbling commodity prices. | If they don't, the central bank has a major problem. As do the major European economies, held in a deflationary spiral by slowing growth, low global demand and crumbling commodity prices. |
| Once you have fired the bazooka, you had better hope it has the desired effect. | Once you have fired the bazooka, you had better hope it has the desired effect. |
| Read more from Kamal here. |