ECB cuts rates to 0.5% in face of eurozone decline

The European Central Bank has reduced interest rates to the historically low level of 0.5 per cent, in a bid to restart the region’s ailing economy.

The main refinancing rate, which previously stood at 0.75 per cent, was cut for the first time in 10 months, the ECB announced at its meeting in Bratislava today.

More policy details are expected to be announced in a press conference this afternoon.

The Purchasing Managers’ Index, which measures the health of the global economy, last month showed that manufacturing contracted in France, Italy, Spain and Germany in recent months, while inflation in Germany decreased sharply adding to fears of underlying price weakness.