ECB Set to Hike Interest Rates Amid Inflation Fears

The European Central Bank (ECB) is expected to raise its key interest rate after a two-day meeting starting Wednesday. The move aims to combat inflation without stifling economic growth.

Higher borrowing costs will make it more expensive for firms and households to borrow, but savers may benefit from better returns on their funds, particularly if they hold bonds.

A quarter-point hike in the ECB's deposit rate to 2.5 percent is seen as a near certainty by analysts, who worry that inflation could snowball into widespread price rises.

The US Federal Reserve is also under pressure to tighten monetary policy to keep inflation at its two-percent target.