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| ECB cuts eurozone rates and launches stimulus programme | |
| (35 minutes later) | |
| The European Central Bank has cut its benchmark interest rate to 0.05%, and introduced new stimulus measures. | |
| The ECB had earlier cut its rate from 0.25% to 0.15% in June, and also became the first major central bank to introduce negative interest rates. | The ECB had earlier cut its rate from 0.25% to 0.15% in June, and also became the first major central bank to introduce negative interest rates. |
| ECB President Mario Draghi also said the bank would launch an asset-backed securities purchase programme. | |
| After the latest news was announced the euro fell to a one-year low against the dollar of $1.3011. | |
| The ECB has been under pressure to kick-start the eurozone economy, as manufacturing output has slowed and inflation has fallen to just 0.3%. | The ECB has been under pressure to kick-start the eurozone economy, as manufacturing output has slowed and inflation has fallen to just 0.3%. |
| Mr Draghi had said after the ECB's last rate cut in June that "for all the practical purposes, we have reached the lower bound". | |
| 'Significant' | 'Significant' |
| The new cut may be accompanied later by further stimulus measures to boost the economy. | The new cut may be accompanied later by further stimulus measures to boost the economy. |
| The benchmark refinancing rate determines what banks pay the ECB for credit, and affects what banks charge companies to borrow. | The benchmark refinancing rate determines what banks pay the ECB for credit, and affects what banks charge companies to borrow. |
| The central bank also cut its deposit rate, what banks pay to keep their money at the central bank, to minus 0.2% from minus 0.1%. | The central bank also cut its deposit rate, what banks pay to keep their money at the central bank, to minus 0.2% from minus 0.1%. |
| It is hoped that this measure will encourage banks to lend to business, rather than sit on their cash. | It is hoped that this measure will encourage banks to lend to business, rather than sit on their cash. |
| A news conference by Mr Draghi later may give more indicators about what else the bank might do. | A news conference by Mr Draghi later may give more indicators about what else the bank might do. |
| He has indicated that the bank may buy large quantities of bonds if needed - known as quantitative easing. | He has indicated that the bank may buy large quantities of bonds if needed - known as quantitative easing. |
| "The cut to the deposit rate is significant and should further weaken the euro," said Aberdeen Asset Management Investment Manager Luke Bartholomew | "The cut to the deposit rate is significant and should further weaken the euro," said Aberdeen Asset Management Investment Manager Luke Bartholomew |