Mario Draghi leaves Europe near recession, in a deflation trap – and out of ammunition

The cut in interest rates to minus 0.5pc takes monetary union into treacherous waters. Academic literature suggests this may already be hitting the "reversal rate" where it does more harm than good. 

It is harder for insurers to match their liabilities. It erodes the net interest margin for banks and is slowly destroying the business model of the small German savings banks that provide 90pc of credit to the Mittelstand family firms.

Ambrose Evans-Pritchard 24 October 2019