ECB Hikes Deposit Rate Amid Fears of Inflation Shock

The European Central Bank has raised interest rates in response to rising inflation fears. The move was anticipated by markets, and the ECB Governing Council, led by President Christine Lagarde, increased the deposit rate by 25 basis points to 2.50 percent.

The main refinancing rate was also hiked by a similar size to 2.65 percent, and the lending rate was lifted to 2.90 percent.

The decision comes amid concerns over an inflation shock as energy prices surge due to the recent escalation of the Iran war.