The European Central Bank cut interest rates to a record low on Thursday in a bid to prevent the eurozone from sinking into a period of stagnation and deflation.
Reducing interest rates for the second time this year, the central bank cut the main refinancing rate to 0.25% from 0.5%. It kept its deposit rate unchanged at 0%.
Some economists had called for the ECB to cut interest rates at Thursday’s meeting, after a surprise decline in inflation. But most had expected the central bank to wait until December, when it will have third-quarter GDP data to consider and a better idea of the trend in inflation.
Eurozone unemployment is stuck at record levels above 12% and the economy is failing to generate momentum after emerging from recession earlier this year.
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