The European Central Bank (ECB) cut its benchmark interest rate by half a percentage point on Thursday, its fourth cut in as many months, but signalled it would pause for breath in February. The central bank reacted to the deepening euro zone recession by cutting credit costs to 2.0 percent, matching its lowest-ever rate setting and in line with what markets and most analysts had expected before the meeting. President Jean-Claude Trichet said the recent flurry of rate cuts was not necessarily over, saying 2 percent was not a floor for ECB rates. Policymakers now saw the risks to inflation, which dropped to 1.6 percent in December, as “broadly balanced”.
