ECB Hikes Interest Rates in Bid to Quell Energy-Fueled Inflation

The European Central Bank has raised interest rates by a quarter percentage point to 2.50% in an effort to cool inflation fueled by high oil prices from the Iran war.

The decision was supported by a stronger-than-expected economy, which suggests businesses can weather higher borrowing costs, according to Christine Lagarde, President of the European Central Bank.

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 bank's move was described as a 'hike to stay ahead of the curve' by Carsten Brzeski, global head of macro at ING bank.