BRUSSELS -- The European Central Bank (ECB) lowered its benchmark rate Thursday by 0.75 percent in order to revitalize the slumping European economy.
The decision was made by the ECB's 21-head council at its regular meeting in Brussels.
The cut brought the bank's benchmark refinancing rate to 2.5 percent.
It is the third time for the ECB to cut its rate since October and it is also the largest cut since the bank took charge of the eurozone monetary policy in 2002.
The ECB has axed rates by a total of 175 basis points or 1.75 percent since early October.
The Bank of England has slashed its key lending rate to 2.0 percent, the lowest level in more than half a century amid mounting evidence that Britain faces a deep recession. [Agencies] |
Economists had expected such a rate reduction or even a cut of 1.0 percent amidst a dimmer economic outlook.
Official figures indicated the eurozone economy has entered recession in the third quarter, and economic sentiment in eurozone dipped to a 15-year low in November.
The Bank of England slashed interest rates by a full percentage point on Thursday to shore up Britain's crumbling economy and head off the threat of deflation.
The cut took rates to 2.0 percent, their lowest level in more than half a century.UK interest rateshave never gone below this level since the central bank was created in 1694.
Analysts had widely expected the move following business indicators suggesting the economy could be heading for an even deeper recession than most people had predicted.
Amid aglobal credit crunchbanks have clamped down on lending, hitting Britain's highly-indebted economy hard. House prices have fallen 18 percent from last year's peak, unemployment is soaring and consumer confidence has taken a dive.
Britain's economy shrank in the third quarter for the first time since the recession of the early 1990s and analysts expect the pain to intensify into next year.
BOE wanted more cuts to stem the tide
Bank of England cuts key rate to 5%