The European Central Bank (ECB) has announced it is cutting interest rates by a quarter of a percentage point to it’s lowest ever – 1.25%.

It is the sixth time the ECB has lowered rates since October 2008, when it stood at 4.25%, as it tries to boost economic activity. However, the cut was smaller than had been expected with many economists having predicted a 0.5% cut to 1%.

Had that been the case, many expected no change in Euro rates for some time. But in a new conference after the rate announcement, ECB President Jean-Claude Trichet hinted that the bank could lower rates even further.

In Ireland, Halifax and Bank of Scotland (Ireland) said they will pass the full reduction to all holders of a variable rate mortgage.
Permanent tsb and AIB have said they will pass on the rate cut to all owner-occupiers but not for mortgages secured against investment properties or holiday homes.