ECB announces euro interest cut

The European Central Bank (ECB) has announced a cut in its main interest rate, bringing the figure down to two per cent.

A reduction of 50 basis points has been implemented by the bank, the fourth time the rate has been lowered since September of last year.

President of the ECB Jean-Claude Trichet explained that the move had been made in response to falling inflation and the onset of a recession in the eurozone.

However, he noted that the bank will watch the economic situation "very closely" before deciding whether or not to make further cuts.

Property investors who are looking to purchase real estate in European countries such as France or Italy may benefit from the move, as the pound has already risen in value against the euro since the reduction was announced.

David Mbaziira of Currencies Direct recently stated that the recent base rate cut by the Bank of England could also benefit investors, telling French Property News that the reduction may prompt overseas buyers to "relocate their assets".

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