ECB Cuts Key Rate By 75 Bps, To 2.5%

Euro-zone economy is already in recession, following a 0.2% GDP decline in the last two consecutive quarters.

ECB’s rate cut, the largest in its history, beats market expectations, as most of the analysts predicted a 0.5% rate cut.

Thursday’s decision was the third rate cut in two months, taking the key rate at its lowest level since March 2006.

The previous two decreases were of 50 basis points, taking the euro-zone interest rate from 4.25% in October to the current 2.5%.

ECB’s move came after other central bank’s more aggresive decisions. On Thursday, the central bank of Sweden cut its key rate by a record 175 basis points, while the Bank of England cut its rate by one percentage point, to 2.0%, the lowest level since 1951.