Surprise rate cut announced by ECB

<p>The ECB has surprisingly cut the base rate of interest for Europe.</p>

The European Central Bank (ECB) has surprised global markets and analysts today (November 7th) by announcing another cut to interest rates.

ECB president Mario Draghi explained the decision to reduce rates to a record low of 0.25 per cent – down from 0.5 per cent – is due to the weak economic recovery in the eurozone.

Inflation in the eurozone was recently recorded to have dropped to 0.7 per cent in October and Mr Draghi said this was another reason for the cut to rates by the ECB.

In a press conference, he explained that the eurozone was seeing "weaker than expected economic activity". Mr Draghi added: "Accordingly, our stance will remain accommodative as long as necessary."

Although the fall in the headline rate of inflation had put pressure on the ECB to make a change to its interest rates, analysts had expected Mr Draghi to hold firm for the time being.

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