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| Version 3 | Version 4 |
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| Eurozone interest rates cut to 1% | Eurozone interest rates cut to 1% |
| (about 1 hour 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 a plan to pump about 60bn euros (£53.5bn; $80.6bn) into the eurozone economy by buying up debt. | 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 ECB's UK and US counterparts have taken similar steps in a policy that 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%. |
| 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. | 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. |
| 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. |
| "It's a significant departure from previous ECB policy," Gilles Moec, senior economist at Bank of America - Merrill Lynch, told Bloomberg News. | |
| "But other central banks have been a lot more aggressive." | |
| See graph of eurozone interest rates | |
| Further steps | |
| 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. |
| "We have not decided today that the new level of our policy rates was the lowest level," Mr Trichet said. | |
| But he added that rates were at an appropriate level for now. | |
| The ECB said it would lend banks unlimited funds for up to 12 months, up from six months. | |
| Mr Trichet also said that the European Investment Bank, the EUs long-term lending bank, would be allowed to gain access to ECB funding by taking part in the central bank's money market operations. | |
| The ECB's decision followed the Bank of England's announcement that it would keep interest rates unchanged at 0.5%. | |
| The Bank of England also said it would pump an extra £50bn ($75.5bn; 56.5bn euros) into the UK economy by buying government and corporate debt, extending its planned spending to £125bn. | |
| Unlike the US and the UK, the ECB cannot buy European government debt because it would have implications for the deficits of individual countries and thus go against the ECB constitution. | |
| 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. |
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