ECB cuts rate

The European Central Bank (ECB) has announced a cut in the main euro interest rate.

In its monthly meeting yesterday, the board of governors voted to trim the main refinancing rate from two per cent to 1.5 per cent.

Such a move may encourage foreign property investors seeking to buy in countries such as Spain, Cyprus, France, Portugal or Italy, as it could see mortgage rates reduced in those countries.

Any effect the cut may have on exchange rates between the euro and the pound may also be monitored, as if these become more favourable it could increase the buying power of British investors.

The cut this month comes after the ECB decided to keep rates on hold in February.

That decision represented a hiatus in a series of reductions, which have seen the rate lowered from 3.25 per cent before the November 2008 meeting.
 

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