(Eric Reguly – Globe & Mail)
The European Central Bank cut its benchmark interest rates to new record lows and may signal shortly that it is making preparations for a narrow form of quantitative easing as both inflation and growth weaken to the point the economic recovery is in doubt.
The ECB’s governing council reduced its main refinancing rate to 0.05%, a drop of 10 basis points, and the deposit rate to minus 0.2%, also a drop of 10 basis points, meaning banks will pay a higher fee to park money overnight at the ECB.
Earlier today, the Bank of England also left rates intact, at a record low of 0.5%, along with its £375-billion asset-purchase program. Read more here.