ECB cuts interest rate

The European Central Bank has cut its key interest rate by 0.25%.

The bank's governing council made the decision at its meeting earlier today.

It is the second cut in as many months and the rate now stand at 1%.

The decision will come as a relief to homeowners, but it remains to be seen if banks will pass the reduction onto its variable customers.

The Tánaiste Eamon Gilmore has promised to again haul in banks to force them to cut interest rates if necessary.

Last month, the Government applied pressure on banks to pass on a rate cut from the ECB.

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