ECB cuts rates to 2.5%

Thursday 4th December 2008, 1:43PM GMT.

ECB cuts rates to 2.5% The European Central Bank has cut its interest rate by 0.75 per cent to 2.5 per cent, following a rate cut in the UK today.

The cut was expected and the president of the ECB, Jean-Claude Trichet, will make a statement later to outline the committee’s reasons.

It will ease the cost of borrowing for the 15 countries that use the euro and is the third month in a row the central bank has reduced the rate.

Interest rates are tumbling across the world as economies slide into recession and the ECB is the latest to cut its rate in an attempt to bolster the eurozone’s economy.

Today, the Bank of England cut rates to two per cent, Sweden’s central bank slashed rates 175 basis points to two per cent, Indonesia dropped its rate to 9.25 per cent and New Zealand’s rate fell 1.5 per cent to five per cent.