ECB Cuts Interest Rates To Record Low

The European Central Bank, in a widely anticipated move aimed at limiting the number of euro zone nations falling into recession, on Thursday cut its main interest rate to a record low of 0.75 percent and cut its overnight deposit and lending rates by 0.25 percentage points each, to 0 percent and 1.5 percent, respectively.

The quarter-point rate cut follows similar moves by the British and Chinese central banks and is aimed to encourage banks to lend to each other rather than depositing funds of up to €800 billion with the ECB overnight.

While several euro zone members in southern Europe already are in recession, recent economic data indicates that the continent's No. 1 economy, Germany, has begun a troubling downturn.

Today's ECB interest rate cut does little to alter the bleak economic outlook, and the Bank is unlikely to announce any bolder unconventional measures for now, Jennifer McKeown of Capital Economics said in a statement, adding that the move is not expected to have much of an effect on Europe's widening economic downturn.

Indeed, some fear that, by reducing banks' profitability, the cut could discourage some types of lending.

U.S. stock futures rose after the moves by the ECB and China's central bank. Standard & Poor's 500-stock index futures rose 0.3 percent to 1,372, the Nasdaq 100 added 0.01 percent to 2,645, and the Dow Jones Industrial Average futures climbed 0.2 percent to 12,892.