8 May 2009

ECB trims rates to 1%

5:02 am on 8 May 2009

The European Central Bank has cut its main interest rate to a new record low.

It also plans to spend about 60 billion euros ($US80 billion) buying covered bank bonds in a bid to stem the euro zone's economic decline.

The latest cut by 0.25% of a point on Thursday, took the main refinancing rate to 1%. The reduction was expected.

The ECB has now lowered its rates by 3.25 percentage points in the past eight months.

President Jean-Claude Trichet said it left benchmark credit costs at an "appropriate" level.

Also as expected, the Bank of England left rates unchanged at 0.5% earlier on Thursday.