US interest rate slashed to 0.25%

The US Federal Reserve has slashed its key interest rate from 1% to 0.25% as it battles the country's recession.

The central bank's key rate, the target rate for overnight federal funds, is at its lowest since records began in 1954.

The rate has been cut drastically by the Federal Reserve from the 5.25% where it stood in September 2007.

Earlier in the day, official data confirmed that the threat of inflation is receding, as consumer prices fell a record 1.7% in November.