ECB Hikes Interest Rates Amid Ongoing Middle East Conflict

The European Central Bank (ECB) raised interest rates by a quarter percentage point to 2.50% in an effort to combat inflation fueled by high oil prices, which have risen above $100 per barrel due to threats against traffic through the Strait of Hormuz.

Bank President Christine Lagarde noted that 'the conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period.'

The ECB's decision was supported by a stronger-than-expected economy, which suggests businesses can weather higher borrowing costs.