Eurozone rates cut to 1.5%
Eurozone interest rates have been slashed by a half percentage point to the lowest level ever as the European Central Bank responds to continental Europe's worst recession since the second world war.
The typical savings per month are approx €25 for every €100,000 borrowed.
Lower interest rates stimulate investment .We all hope this works and business sees this an opportunity to invest for the future
The ECB said its main interest rate would fall from 2 per cent to 1.5 per cent, bringing the total cut since early October to 275 basis points,
We await details of lenders plans regarding the passing of these rates onto their customers and we will update our site as soon as more information is received.Existing tracker holders will automatically get the benefit of the 1/2 % reduction over the coming days .
The latest cut came after ECB governing council members received updated forecasts thought have shown a dramatically worse contraction this year in eurozone economic activity than in previous projections, released in December.
The forecasts are also likely to have shown eurozone inflation undershooting significantly the ECB's target of an annual rate "below but close" to 2 per cent.
Attention will now focus on whether Jean-Claude Trichet, ECB president, hints at further interest rate cuts in coming months, and whether the ECB will follow the Bank of England and US Federal Reserve in adopting additional "non-standard" measures to combat the economic crisis.
Eurozone gross domestic product fell by 1.5% in the final quarter of 2008, Eurostat, the European Union's statistical office confirmed ahead of the ECB announcement. That was the largest quarterly contraction on record. Exports slumped by 7.3 per cent and investment by 2.7 per cent.
But the start of 2009 appears to have brought little relief. Spain reported industrial production in January was 20.2 per cent lower than a year before, the same rate of contraction in December.
In the light of continuing bad news it is vital that appropriate steps be taken both at home and in Europe to stimulate activity,As has been seen here and indeed across the globe the key first step is getting to grips with where we are before knowing where we can go.
Cunsumers are the life blood of the economy and need to have a positive outlook before they will spend freely.The need to establish what exposures banks and life companies have got us into is the starting point.They need to write all doubtful loans and investments down to realisable value and start again1