The European Central Bank has cut its key interest rate by a quarter of a percentage point to a record low of 0.75 per cent to boost a eurozone economy weighed down by the government debt crisis.

The move followed a rate cut by China’s central bank and new stimulus measures by the Bank of England as global financial authorities seek to shore up a slowing global economy.

European leaders last week agreed on new steps to strengthen market confidence in their shared euro currency bloc. They agreed to set up a single banking supervisor to keep bank bailouts from bankrupting countries and made it easier for troubled countries to get bailout help.

Those steps helped calm financial markets, which have expected the ECB to follow up with more help in the form of a rate cut.

The cut in the refinancing rate could mean lower borrowing costs for banks, businesses and consumers. The rate is what banks pay the ECB for loans and through them influences many other rates in the economy. In theory cheap borrowing makes it easier for businesses and people to decide to spend, but some economists say it may have little effect since interest rates are already very low.