The move was widely expected after ECB president Mario Draghi said the bank was ready to act last month, but analysts remain sceptical that the cut will make a big difference.
“Inflation expectations for the euro area continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, two per cent over the medium term,” said Draghi in an introductory statement before this afternoon’s press conference.
“In keeping with this picture, monetary and loan dynamics remain subdued. At the same time, weak economic sentiment has extended into spring of this year.
“The cut in interest rates should contribute to support prospects for a recovery later in the year. Against this overall background, our monetary policy stance will remain accommodative for as long as needed.”