The European Central Bank is cutting its key interest rate, a step to boost an economy that’s struggling to grow as consumers burned by inflation warily eye price tags and businesses try to chart a course amid political turmoil in leading economies France and Germany.

The European Central Bank lowered borrowing costs for a fifth time since June, with the region’s economy stalling and the 2% inflation target in reach.

The European Central Bank is widely expected to cut interest rates for the fifth time since it began easing monetary policy.

ECB chief Christine Lagarde (pictured) said the single currency bloc was 'set to remain weak in the near term' as the rate was cut from 3% to 2.75%.