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Not even the seven reductions in interest rates since June have managed to revive activity.
study found that the negative effects of deliberate deficit cuts are usually softened by reductions in interest rates.
Among them are the point that deficit reductions are stimulative on the demand side thanks to reductions in interest rates.
1.45pm BST Draghi says - We have discussed possible reductions in interest rates but the governing council "in its entirety" decided this was not the right time.
He said possible reductions in interest rates had been discussed, but the governing council had determined this was not the right time.
The figures also suggested that a consumer binge, inspired by seven reductions in interest rates last year, may now be easing.
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There is scope for a further reduction in interest rates.
"We've had a big reduction in interest rates that has reduced the cost of servicing the debt.
"Surely the thing that would most help small businesses is a sustained reduction in interest rates.
Brokers attributed tne im proved performance to the pos sibility that there may be a reduction in interest rates soon.
As The Economist went to press, the European Central Bank (ECB) was expected to announce a further reduction in interest rates.
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