European Central Bank surprises markets by cutting key interest rate a quarter point

The European Central Bank has startled investors with a surprise cut in its benchmark interest rate.

The bank lowered the benchmark refinancing rate to a record low 0.25 percent from 0.5 percent at a meeting of its 23-member governing council in Frankfurt.

Recent economic data such as lower than expected inflation of 0.7 percent have suggested that Europe's economic recovery remains weak. But most economists thought the bank would wait to offer more economic stimulus at least until December when it will have new forecasts from its own staff.