ECB cuts rate to just 0.05%

At today’s meeting of the Governing Council of the ECB it was announced that the  main refinancing interest rate will be decreased from 0.15% to 0.05%,  from 10th September 2014. This is the rate that affects tracker mortgages – so that is some  good news for anyone lucky enough to still have a tracker mortgage. This is an all time low for the ECB rate.

The interest rate on the deposit facility will be decreased to minus o.20%, with effect from 10 September 2014. This does not affect consumers directly – it is the rate that banks get when they leave funds on deposit with the ECB.

These rate drops show how worried the ECB is about  the very low and still falling Eurozone consumer price inflation, weakening inflation expectations and faltering Eurozone economic activity.
The euro has tumbled  against the US dollar to a new one-year low, as traders react to the unexpected cut in interest rates.

See ECB Historic Interest Rates