THE EUROPEAN CENTRAL Bank has cut its key interest rate by 25 basis points to a record low of 0.25 per cent this afternoon.

The news from the Frankfurt is a pre-Christmas boost to some 375,000 people who are on tracker mortgages that are tied to the ECB’s main interest rate for the eurozone.

The cut is the first in six months when ECB president Mario Draghi announced a similar 25 basis points cut to 0.75 per cent and today’s move marks his fifth since he took office as president in November 2011.

The cut is seen as a reaction to falling inflation and the latest forecasts that the eurozone economy will expand more slowly next year than previously expected.

The ECB’s main task is to keep the cost of living relatively unchanged meaning an ‘ideal’ inflation rate should be two per cent.

In October, inflation in the euro zone declined to an annual rate of 0.7 per cent.

That’s all folks: Troika wrap up their final visit to Ireland today