ECB's Draghi plays his last card to stave off deflation

"We don't anticipate it will be necessary to reduce rates further," he said. The throw-away comment was instantly taken to mean that -0.4pc is the absolute floor that will be permitted by Germany.

Marc Ostwald, from Monument Securities, said the ECB has bet everything on one last throw of the dice. "It's a kitchen sink job, but at the same time Draghi is saying there is a limit to what they can do, that this is it, and there will nothing more," he said.

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The Euro Stoxx 50 index of equities fell 1.6pc even though the menu of eligible assets for QE was widened to include high-grade corporate bonds for the first time, a crucial move intended to ease stress in the credit markets, especially in southern Europe.

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"Everything that the ECB has just done is about balance sheet resolution for banks after dodging the problem for years with extend and pretend," he said.

Mr Draghi may have fallen between two stools. The markets have given his package a cool reception, but German economists have attacked him for going too far.