ECB Hikes Interest Rates Amid Ongoing Energy Price Pressures

The European Central Bank (ECB) has raised interest rates to combat inflation driven by high oil prices. The decision was made at a meeting in Berlin, where the ECB's benchmark rate was increased by a quarter percentage point to 2.50 per cent.

This move comes as the eurozone's inflation rate remains above target at 3.3 per cent, with energy costs being a major contributor. Oil prices have risen above US$100 per barrel due to tensions in the Middle East.

Bank President Christine Lagarde emphasized that the outlook is highly uncertain, with risks to the upside for inflation and to the downside for economic growth. She stated that future rate decisions will be made on a meeting-by-meeting basis based on incoming data.