A consensus is forming at the European Central Bank to take the interest rate it charges banks to park money deeper into negative territory in December, four governing council members said, a move that could weaken the euro and push up inflation.

"Let's go for a big cut," one Governing Council member, who asked not to be named, said. "There is no bottom to the deposit rate in the near term, it could be lowered quite sharply still," he said. "There must be a bottom but it's further out."

... The rate setter said that "zero lower bound", a term meaning the bottom for interest rates, either "no longer exists, or if it does it is well below zero".

The risk in the cut is a squeeze on margins in the banking sector, already under pressure, and it is not clear that banks would boost lending to avoid the punitive rate for parking money with the central bank.

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