European Central Bank

The European Central Bank (ECB) has announced it will cut interest rates an overnight bank deposits and extend its quantitative easing programme in a bid to boost growth in the eurozone economy.

Interest rates on overnight deposits made by banks with the ECB have been cut from 0.2% to 0.3% - a move designed to make it more profitable for banks to provide loans to individuals and businesses. Its main interest rates, however, was kept at 0.05%.

The size of the ECB's quantitative easing programme was kept at €60 billion per month, but it was extended from September 2016 to at least March 2017. ECB president Mario Draghi said that quantitative easing was working, but stressed that it needed to be extended in order to bring inflation back to its target of 2%.

Inflation in the eurozone, like in the UK, has been floating around zero for several months and has even fallen negative. But speaking in 2014, ECB president Mario Draghi explained that low inflation can intensify debt problems - low inflation, or deflation, discourages people from making purchases because they expect prices to be lower in the near future.