CNBC ECB Cuts Interest Rate by Half-Point to 1.5%

The European Central Bank cut interest rates to an all-time low of 1.5 percent on Thursday, keeping up a record pace of reductions as the euro zone economy slides deeper into recession.

All but two of 78 economists polled by Reuters last week predicted the 50 basis point move, which took euro zone rates down from 2.0 percent.

The ECB has now slashed borrowing costs by 275 basis points since October.

Money market traders and other financial players had also fully priced in the cut, steered by dire euro zone economic data in recent weeks and a steady stream of hints from policymakers. It takes rates to the lowest level in the ECB's 10-year history.

But analysts expect the central bank to keep cutting in the next few months as the financial turmoil and recession exert a tighter stranglehold on the euro zone.

"Fifty basis points is exactly as expected but there are a lot of critical issues that we look to be addressed at the press conference," said Barclays Capital economist Julian Callow. more...