ECB cuts interest rate to record low
Jim Boulden looks at market reaction to the European Central Bank cutting its interest rate to a record low of 0.05%.

It took everyone virtually everybody by surprise today, and i'm talking about the European central bank and its move to cut its main interest rate to a new record low, look at it, 0.05%, all part of a range of measures announced today to bring life back in the Europe's four train economy, now the ECB president says he wants to add off the risk of yet another recession and deflation inside the Euro zone, all right, let's get out to Jim Boulden for the details, he is live with us now in London, Jim, what is the reaction? what does it mean?
Well, it took me by surprise as well, Jim, i have to say with watching for that press release, and i can tell you it took the markets by surprise, now you can't give away the punch line on top of the show, but that show it again, this is what happened to the Euro versus the dollar when the announcement came, this is the pressure list right here, 12:45 London time that's when they announced they were cutting the three main interest rates in the European central bank, then it starts trickling down and trickling down until we get to the press conference, then we thought that the central bank is doing a lot of people may ask for, it's very complicated, it's called buying assets back security, the idea here is to pump more money into the Euro zone, Jim, we have growth at 0.03% barely moving at all, we have triple dip recession in Italy, we have a high unemployment of course, we have very little growth and we have of course sanctions against Russia, all of that really conspiring against any kind of growth here in Europe, so the idea of this actually helps because exports will be cheaper from the Euro zone into the rest of Europe, into north America, into Asia, so there is two goals here, one is to get the Euro cheaper which it did at least for today, the other is try to pump money into small and medium sized companies loans through the banks coming from the ECB, that idea has always been out there, hasn't worked yet since we even got into this small recovery, but the European central bank is trying to do as much as it can, didn't do the las thing it could do, that's called quantitative of easing, Jim, they haven't done that, that's the *, that's why they buy all these bonds, that's what we've seen in the US, we've seen in the UK, we've seen of course in Japan, so the idea is can you do quantitative of easing, we haven't got there yet, but this was a pretty momentous day for the Euro zone, a desperate move i have to say, Jim.