ECB President, Mario Draghi.
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ECB cuts interest rates by quarter per cent to 1.25%

The European Central Bank has surprised everyone by cutting interest rates by a quarter per cent, to 1.25%. Most economists had expected a rate cut next month instead.

The move was announced by the ECB's new president, Mario Draghi.

But markets were disappointed that he refused to do anything to cut the price of government borrowing in Italy and Spain.

Brian Milligan reports.