ECB Hikes Interest Rates Amid 'Highly Uncertain' Economic Outlook

The European Central Bank (ECB) raised interest rates by a quarter percentage point to 2.50 per cent at its meeting in Berlin, in an effort to combat inflation that is being driven up by high oil prices.

The decision was made despite the economic outlook remaining 'highly uncertain', and comes after a stronger-than-expected economy suggested businesses can weather higher borrowing costs.

The conflict in the Middle East is continuing to put upward pressure on inflation, with prices set to remain above target for an extended period, according to the ECB.