The Europe Central Bank jumps ahead of the Fed in lowering rates. But future cuts may be limited.

By DAVID McHUGH
AP Business Writer

FRANKFURT, Germany (AP) — The European Central Bank cut its key interest rate Thursday by a quarter point, moving ahead of the U.S. Federal Reserve as central banks around the world lean toward lowering borrowing costs – a shift with far-reaching consequences for home buyers, savers and investors. The ECB cut its benchmark rate to 3.75% from a record high of 4% at a meeting of the bank’s 26-member rate-setting council in Frankfurt. The question now is how far and how fast the ECB, Federal Reserve and other central bankers will go in lower their benchmarks, with inflation subsiding but not yet back to levels considered best for the economy.