European Central Bank Cuts Interest Rates To 0.25%

Mario Draghi announced that the European Central Bank (“ECB”) would cut interest rates to a record low of 0.25%, down by a quarter of a percent. The move suggests that the Eurozone economies are not recovering as quickly as anticipated and that the Bank is not concerned about inflation. In fact, it seems that the Eurozone economies are more likely to suffer from deflation than inflation.

The Eurozone have been suffering from economic weakeness for some time now and the drop in rates may lead to downward pressure on the Euro. Whether this will have any effect remains to be seen.