The European Central Bank has decided to lower the eurozone interest rate to 1.0% – the lowest since the single currency came into being.

The move will be welcomed by many mortgage holders throughout the eurozone who now have a further .25% cut in interest rates.

ECB President Jean-Claude Trichet in a news conference said the latest data and survey information suggested tentative signs economic conditions had stopped deteriorating.

“More recently there have been some positive signs … of stabilisation albeit at low levels,” Trichet said. “Overall, economic activity is going to be weak for the remainder of the year before gradually recovering in the course of 2010.”

In Ireland, AIB, Irish Life and Permanent, KBC Bank, Bank of Ireland and ICS, said they would pass on the rate cut in full to owner occupiers with a variable rate mortgage.

KBC Bank was under pressure by many customers last month when it failed to pass on the previous interest rate cut, despite its Chief Economist predicting an interest rate cut before the ECB had made such a move.

However, Ulster Bank and First active who also both failed to pass on any cut last month have announced that they won’t pass on any cuts to mortgage holders again, citing that that it must take into account the ‘needs of savers as well as borrowers’.

Other banks such as Halifax and National Irish Bank, said they are reviewing the situation in light of the interest rate cut.