December 6, 2002	Friday	Shawwal 1,1423

FRANKFURT, Dec 5: The European Central Bank gave the struggling euro zone economy an early Christmas gift on Thursday by slashing borrowing costs by half a percentage point to their lowest level in over three years.

The ECB said it had cut its benchmark refinancing rate to 2.75 per cent from 3.25 per cent after holding rates steady for more than a year.

The cut was well-signalled in recent weeks by ECB officials, with the bank’s President Wim Duisenberg saying on Tuesday that the inflation outlook had improved while the region’s economic recovery appeared fragile and uncertain.

The ECB cut comes after months of pleading for such a move from several euro zone governments, such as Germany and France, struggling to revive their sputtering economies while sticking to the bloc’s rigid budgetary curbs.—Reuters