ECB Raises Interest Rates by Quarter Point to Combat Oil-Driven Inflation

The European Central Bank (ECB) raised interest rates by a quarter percentage point to 2.50% on Thursday, in an effort to cool inflation driven by high oil prices from the Iran war.

Despite a stronger-than-expected economy, the bank acknowledged that 'the conflict in the Middle East continues to generate inflation pressures' and that inflation is likely to remain above target for an extended period.

The ECB's decision was supported by its assessment of a 'highly uncertain' economic outlook. The central bank also stated that it would be closely monitoring market developments, particularly with regard to oil prices, which have risen above $100 per barrel due to lower tanker traffic through the Strait of Hormuz.