The European Central Bank has cut interest rates by a quarter percentage point under new head Mario Draghi to boost weakening growth in the debt-hit eurozone.

The move, which comes earlier than expected by many economists, takes the bank's benchmark rate to 1.25 %.

European growth is expected to slow to near or below zero in the last three months of the year.

Uncertainty from Europe's debt crisis is a factor. Business and consumers are reluctant to spend and investors because they fear more financial turmoil if Greece defaults on its debts.

Now markets are waiting for Mr Draghi's first news conference to see if he indicates the bank is willing to intervene more forcefully in bond markets to keep Greece's troubles from spreading to Spain and Italy.