ECB Hikes Interest Rates to Combat Inflation

The European Central Bank (ECB) has raised its benchmark interest rate by a quarter percentage point to 2.50% in an effort to combat inflation fueled by high oil prices.

The decision was made at a meeting held in Berlin, away from the ECB's Frankfurt headquarters, and comes after the bank last raised rates on June 11.

Bank President Christine Lagarde said 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 move was supported by a stronger-than-expected economy, which suggests businesses can weather the higher borrowing costs.