European Central Bank cuts key interest rate to 3.25%

The European Central Bank (ECB) on Thursday cut its key interest rate by 0.25 percentage points, with inflation in the eurozone falling to its lowest level since early 2021.

The deposit facility rate - the interest that banks receive for parking funds at the ECB - now stands at 3.25%.

The bank's refinancing rate - the interest rate at which banks borrow money from the ECB - was also lowered by 0.25 percentage points to 3.40%.

After a long period of increasing rates to help control inflation in the wake of the coronavirus pandemic, the ECB has now cut them for a third time this year.

Many economists had expected another rate cut this month, as eurozone inflation dropped to 1.7% in September.