ECB Hikes Interest Rates Amid Eurozone Inflation Concerns

The European Central Bank (ECB) raised interest rates by a quarter percentage point to 2.50% in an effort to quell inflation fueled by high oil prices.

The decision was taken at a meeting held in Berlin, away from the bank's Frankfurt headquarters, and was supported by a stronger-than-expected economy that suggests businesses can weather higher borrowing costs.

The conflict in the Middle East is continuing to generate inflation pressures, with eurozone inflation coming in at 3.3% in August, above the ECB's target of 2%. Oil prices have risen above $100 per barrel due to lower tanker traffic through the Strait of Hormuz that are under threat of Iranian attack.

The ECB said in an accompanying statement that 'the economic outlook remains highly uncertain,' and analysts will be parsing remarks by President Christine Lagarde later this week for clues about whether more interest rate increases are coming.