For eurozone interest rates to fall, it has long been clear that the European Central Bank would have to be able to say inflation was under control. On Thursday Jean-Claude Trichet, ECB president, indicated that the banking crises in the US and Europe, and a rapidly deteriorating eurozone growth outlook, meant that point had been as good as reached.

Reworking his previous script, Mr Trichet told journalists after the ECB’s council meeting that inflation risks in the 15-country eurozone had “diminished somewhat”, although they had not disappeared. Moreover, consumers’ and financial markets’ expectations about future inflation rates – which had been rising alarmingly – were stabilising.