The European Central Bank has cut its headline interest rate by a quarter of a point to 3.25% after inflation in the eurozone fell below its 2% target.
ECB policymakers were under pressure to reduce the deposit rate after inflation figures out earlier on Thursday showed annual prices growth in the single-currency bloc had eased in September to 1.7%, down from 2.2% the previous month.
The cut is the ECB’s third of the year, putting it two ahead of the Bank of England, which is widely forecast to cut the cost of borrowing in the UK by 0.25 percentage points from the current level of 5% when the Bank’s monetary policy committee meets again next month.
In the US the Federal Reserve has indicated it is minded to also trim rates in coming months, although there have been hints that it may skip a cut at next month’s meeting.
Gold reached a record high just before the announcement, hitting $2,688.82 (£2,065.26) an ounce for the first time, lifted by forecasts of interest rate cuts around the world and uncertainty ahead of next month’s US election.
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