ECB cuts rate to record low but steers clear of more dramatic moves

The European Central Bank cut interest rates to a record low yesterday 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 ECB policymakers’ decision to cut their main refinancing rate by a quarter point to 0.75% was unanimous and followed a dire batch of economic data that showed Germany entering a modest downturn.

European shares gained on the decision before turning negative after ECB president Mario Draghi said the eurozone would recover only slowly, threatened by the debt woes of several of the bloc’s members and banks’ unwillingness to lend.