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BBCNEWS - 2 May 2013
The European Central Bank (ECB) has cut its benchmark interest rate to a new record low amid ongoing worries about the eurozone's economic health.
The widely-expected cut to 0.50% from 0.75% is the first in 10 months.
Worries about eurozone economies were underlined on Thursday with data showing manufacturing activity across the 17-nation bloc shrank in April.
In Germany, the eurozone's biggest economy, manufacturing contracted for the second month running.
Austerity debate
Official data released on Tuesday showed record high unemployment in the eurozone, and inflation at a three-year low.
The ECB's key interest rate was already at the historic low of 0.75%
Well ahead of the ECB's announcement, many economists were forecasting that lower interest rates were likely, but said the fresh data released this week made the case for a cut even stronger.
ECB president Mario Draghi is due to hold a news conference later when he will expand on the reasons behind the rate decision.
There are concerns that the ECB's low interest rates are not feeding through to those economies most in need of a boost, with potential lenders still worried about the economic health of countries such as Greece and Spain.
In recent months there have been growing calls for European countries to move away from austerity measures, which critics say are stifling growth. Instead there are calls for a greater focus on stimulus measures.
The European Central Bank (ECB) has cut its benchmark interest rate to a new record low amid ongoing worries about the eurozone's economic health.
The widely-expected cut to 0.50% from 0.75% is the first in 10 months.
Worries about eurozone economies were underlined on Thursday with data showing manufacturing activity across the 17-nation bloc shrank in April.
In Germany, the eurozone's biggest economy, manufacturing contracted for the second month running.
Austerity debate
Official data released on Tuesday showed record high unemployment in the eurozone, and inflation at a three-year low.
The ECB's key interest rate was already at the historic low of 0.75%
Well ahead of the ECB's announcement, many economists were forecasting that lower interest rates were likely, but said the fresh data released this week made the case for a cut even stronger.
ECB president Mario Draghi is due to hold a news conference later when he will expand on the reasons behind the rate decision.
There are concerns that the ECB's low interest rates are not feeding through to those economies most in need of a boost, with potential lenders still worried about the economic health of countries such as Greece and Spain.
In recent months there have been growing calls for European countries to move away from austerity measures, which critics say are stifling growth. Instead there are calls for a greater focus on stimulus measures.
