The European Central Bank cut interest rates a sharp half a percentage point to a record low today now that inflation is falling.
Markets cheered the widely expected cut, which follows similar action in Sweden and New Zealand and puts official rates for the world's second-largest economic region at 2 per cent, their most stimulative ever.
ECB President Mr Wim Duisenberg flagged the credit easing earlier this week when he said the surging euro has caused inflationary pressures to retreat significantly while a recovery is expected to build only slowly toward year end.
Mr Duisenberg holds a news conference at 1.30p.m Irish time to explain the ECB Governing Council's decision. Earlier, the Bank of England left interest rates unchanged.