| European Central Bank cuts rates by 0.25% | The European Central Bank cut its main refinancing rate by a quarter of a percentage point to 0.50 per cent on Thursday, a move that signals concern about falling inflation and rising unemployment in the recession-bound eurozone.
A stream of bad economic data, pushing prospects for a recovery further back, had increased pressure on the ECB to act. It last cut rates 10 months ago in July.
However, there is widespread scepticism, even within the bank, that an interest-rate cut will do much to help economies bearing the brunt of the eurozone's record unemployment, such as Spain, Greece and Portugal.
The so-called transmission mechanism by which ECB rates are translated into the real world cost of borrowing for companies and households has broken down in stressed southern eurozone countries, meaning that they are unlikely to see much benefit from a cut to the ECB's main interest rate.
http://link.ft.com/r/LVA6WW/WH7GVV/M9C43G/EX7928/DXTZWY/RF/h?a1=2013&a2=5&a3=2
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