The European Central Bank (ECB) kept its main policy interest rates on hold in January 2012 after previously making cuts twice in recent months. At 1%, the rate now stands at the level that was maintained throughout the financial crisis.

Tim Ohlenburg, of Cebr, said: “One percent could be the floor that the ECB is unwilling to go below. That would mean that increasing the amount of money in the economy, e.g. via asset purchases, rather than regulating its price (interest rates) is the new policy focus.

“The European economy may already be in recession, as evidenced by the estimate of the German Federal Statistical Office that the country’s economy probably contracted in the last three months of 2011. If output is even falling in the region’s strongest economy, which saw December unemployment fall further, prospects for weaker member countries are pretty bleak.”