ECB cuts rates to new low

(Reuters) - The European Central Bank cut interest rates to a new record low on Thursday, responding to a slump in inflation way below its target that has sparked fears the euro zone's economic recovery could stall.

The 23-man Governing Council had faced intense market scrutiny in the run-up to Thursday's decision after a shock slump in euro zone inflation to 0.7 percent in October - far below the ECB target of just under 2 percent.

Calls from government ministers and industry - the loudest from Italy - for the ECB to loosen policy to help bring down the euro's exchange rate had also heaped pressure on the Council, though few analysts expected a move this month.

The ECB cut its main refinancing rate to 0.25 percent. It held the deposit rate it pays on bank deposits at 0.0 percent and cut its marginal lending facility - or emergency borrowing rate - to 0.75 percent from 1.00 percent.

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