The European Central Bank (ECB) on Thursday cut the benchmark interest rate by 25 basis points to 0.75 percent, a record low.

The decision was made at the monthly governing council meeting. The interest rates on the marginal lending facility and the deposit facility have also been trimmed by 25 basis points to 1.5 percent and 0 percent respectively, according to a statement released by the ECB.

The new rates will take effect from July 11.

Inflationary pressure over the policy-relevant horizon has been dampened further as some of the previously identified downside risks to the euro area growth outlook have materialized, ECB President Mario Draghi said at a news conference on Thursday.

Draghi stated the decision to cut interest rates was taken unanimously by the governing council at the meeting.

According to him, real GDP growth in the eurozone was flat in the first quarter of 2012, following a decline of 0.3 percent in the previous quarter. The euro area economy avoided a recession, defined as a contraction of the GDP for two consecutive quarters or more.

Draghi said economic growth in the euro area continues to remain weak, with heightened uncertainty weighing on confidence and sentiment.

He added that the annual growth rate of loans to the private sector declined to 0.4 percent in May.

The ECB welcomed the conclusions of the recent European Council in Brussels to address financial market tension, restore confidence and revive growth, Draghi said.