The Bank cut its benchmark deposit rate to 3.25% from 3.5%.

It said: "The decision to lower the deposit facility rate - the rate through which the Governing Council steers the monetary policy stance = is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission.

"The incoming information on inflation shows that the disinflationary process is well on track. The inflation outlook is also affected by recent downside surprises in indicators of economic activity. Meanwhile, financing conditions remain restrictive."

Earlier, data from Eurostat showed that the annual rate of eurozone consumer price inflation came in at just 1.7% last month. This was down from the flash reading of 1.8% released two weeks ago and well below the 2.2% rate registered in August.

Across the eurozone, services inflation eased to 3.9% from 4.1% the month before, while energy prices tumbled 6.1% after a 3.0% decline the previous month.

Carsten Brzeski, global head of macro at ING, said: "The decision to cut rates only five weeks after the last cut and with only very few pieces of economic data since then, suggests that the ECB must have become much more concerned about the eurozone’s growth outlook and the risk of inflation undershooting the target.

"Interestingly, the official language in the ECB's decision was almost unchanged from the September meeting."