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Osborne: ECB support 'necessary but not sufficient'

Chancellor George Osborne says financial support from the European Central Bank is "necessary but not sufficient" to ensure a recovery in the eurozone economy.

Speaking in Davos, Mr Osborne said the "drastic action" taken by the ECB showed the weakness of the European economy compared to the British economy, as he called on governments to ensure they had their public finances "in order".

The Chancellor said Britain supported any measures that would make the European economy stronger.

Eurozone slides into deflation as prices drop 0.2%

Inflation in the 18 countries using the euro in December was down 0.2 percent year-on-year Credit: Reuters

Eurozone inflation has fallen below zero for the first time since 2009.

Consumer prices in December dropped by 0.2 percent year-on-year, down from 0.3 percent year-on-year in November.

Economists had expected a -0.1 percent year-on-year fall in prices.

The last time euro zone inflation was negative was in October 2009, when it was -0.1 percent.

The European Central Bank wants to keep inflation below but close to 2 percent over the medium term.

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ECB rate drop to support lending to 'real economy'

The President of the European Central Bank, Mario Draghi, said policy measures announced today, including a drop in the main Eurozone interest rate, will help stimulate European economies.

Mr Draghi told a press conference in Frankfurt: "We decided on a combination of measures to provide additional monetary policy accommodation and to support lending to the real economy."

ECB cuts main interest rate to 0.15%

The European Central Bank has cut its main interest rate used to set consumer loans in the Eurozone to 0.15%.

ITV News Business Editor Richard Edgar is following developments.

Meanwhile Eurozone banks will now have to face negative interest rates, meaning they have to pay 0.1% to deposit their own money.

Riot police and protesters clash in Madrid

Clashes between demonstrators and riot police erupted in Madrid, as tens of thousands of people took over the Spanish capital to protest against EU-imposed austerity.

Protesters clash with police in Madrid Credit: AP

Spanish newspaper El Mundo published dramatic footage showing police detaining several people during the protests in Madrid.

Police presence was heavy among groups carrying republican and communist flags, banners calling for an end to cuts in the health service, education and affordable housing.

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