ECB cuts rate to record low

City A.M. Reporter
The European Central Bank cut interest rates to a record low to breathe life into a deteriorating Eurozone economy but steered clear of more dramatic measures such as buying government bonds or flooding banks with fresh liquidity.

The quarter-point cut in the ECB's main refinancing rate to 0.75 percent was in line with market expectations and followed a dire batch of economic data that show even euro zone powerhouse Germany is entering a modest downturn.

European shares extended gains on the news and the euro fell. Of 71 economists polled by Reuters, 48 had expected the bank to cut, most of them by 25 basis points, though some others forecast a larger decrease.

But stock gains were relinquished after ECB President Mario Draghi said the euro zone economy would recover only gradually, threatened by the debt problems of several of the bloc's members and banks' unwillingness to lend.