ECB Raises Interest Rates Amid Eurozone Inflation Spike

The European Central Bank (ECB) has raised its policy interest rate by 0.25 percentage points to 2.5%, in response to accelerating inflation in the eurozone and pressures from high energy prices.

This is the second interest-rate hike decided by the ECB in the past three months, and the first series of increases in the past three years.

The annual inflation rate in the eurozone rose to 3.3% in August, its highest level since September 2023, driven by a 14.3% increase in energy costs.