ECB Hikes Interest Rates Again Amid Middle East Energy Shock

The European Central Bank (ECB) has raised its benchmark interest rate for the second time this year to combat the rising energy costs triggered by the Middle East conflict.

The ECB lifted its benchmark rate by a quarter percentage point to 2.5%, its highest level since March last year, in response to the surge in global energy prices.

The Brent international oil benchmark has climbed back above $100 a barrel this week, while natural gas prices reached their highest level in more than three years.

Sylvain Broyer, chief economist for Europe, Middle East and Africa at S&P, said the inflation outlook has worsened over the summer, with supply shocks multiplying and demand adding to inflation.