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Eurozone interest rates cut to 1% Eurozone interest rates cut to 1%
(30 minutes later)
The European Central Bank (ECB) has cut interest rates in the eurozone to a record low of 1%, down from 1.25%.The European Central Bank (ECB) has cut interest rates in the eurozone to a record low of 1%, down from 1.25%.
The central bank also agreed to take alternative measures to boost growth in the 16 countries that use the euro. The central bank also agreed a plan to pump about 60bn euros (£53.5bn; $80.6bn) into the eurozone economy by buying up debt.
The move follows similar steps by the ECB's UK and US counterparts and is commonly known as quantitative easing.
It is the seventh time the ECB has lowered its key rate since October 2008, when it stood at 4.25%.It is the seventh time the ECB has lowered its key rate since October 2008, when it stood at 4.25%.
The ECB said it is willing to follow its US and UK counterparts into directly buying up debt to get money flowing in the economy. ECB president Jean-Claude Trichet said the ECB had decided in principle to buy euro-denominated covered bonds, a safer type of corporate debt, and such purchases would total about 60bn euros.
This policy is commonly known as quantitative easing.
ECB president Jean-Claude Trichet said the ECB had decided in principle to buy euro-denominated bonds.
Mr Trichet said more details would be given when the central bank next meets on 4 June.Mr Trichet said more details would be given when the central bank next meets on 4 June.
He also said that the ECB would provide banks with longer-term refinancing and did not rule out lowering rates further.He also said that the ECB would provide banks with longer-term refinancing and did not rule out lowering rates further.
The ECB's decision followed the Bank of England's announcement that it would keep interest rates unchanged at 0.5% and pump an extra £50bn ($75.5bn; 56.5bn euros) into the UK economy by buying government and corporate debt.The ECB's decision followed the Bank of England's announcement that it would keep interest rates unchanged at 0.5% and pump an extra £50bn ($75.5bn; 56.5bn euros) into the UK economy by buying government and corporate debt.
Central banks around the world are using more unconventional monetary policy methods to support their economies, with interest rates at record low levels.Central banks around the world are using more unconventional monetary policy methods to support their economies, with interest rates at record low levels.