ECB cuts key lending rates to 2 percent

The European Central Bank Thursday trimmed its key lending rate to 2 percent as slumping European economies have surpassed inflation as its leading concern.

A month ago, the bank made its steepest rate cut ever, The Washington Post reported. At the time, bank President Jean-Claude Trichet suggested that further rate cuts were unlikely, the Post said.

The bank keeps a sharp eye on inflation, which can be triggered by rate cuts that encourage spending. But, as economies have stumbled, prices have stagnated and even retreated as inflation bellwether oil has seen prices fall from above $147 per barrel in July to less than $40 a barrel today.

Financial firms are still reeling from the economic shake-up. J.P. Morgan Chase Chief Executive Officer Jamie Dimmon warned, the worst of the economic situation is not yet behind us, after the bank posted fourth quarter profits of $702 million, a 76 percent drop from the fourth quarter of 2007.