Markets favourable to ECB rate cut but Draghi cautious

Markets reacted favourably to the ECB decision to halve its interest rate to 0.25%, signalling good news for Ireland as its bailout comes to an end.

ECB president Mario Draghi, however, was very cautious about the future prospects for the eurozone economy generally, warning that, in many areas, the risks were on the downside.

“Recovery is proceeding but it is weak, uneven, fragile, and starts from low levels,” said Mr Draghi. “The unemployment rate is still very high. It looks like it is stabilising but it is at the very top, so it is very important to have low interest rates.”