The European Central Bank raised interest rates by a quarter point to 2.25 per cent on Thursday, becoming the first central bank in the G7 to increase borrowing costs in response to the Middle East energy shock.
The widely expected decision marks the ECB’s first increase since September 2023 and brings rates back to a level last seen a year ago.
“The war in the Middle East is generating inflation pressures,” the central bank said as it announced the decision.
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