Policymakers at the European Central Bank (ECB) have decided to raise the benchmark interest rate by 50 basis points, exceeding market expectations and marking the first time in 11 years that the bloc’s monetary authorities have hiked rates.
The move brings the ECB’s policy rate up to zero percent from negative territory, where rates had been pegged for the past eight years in a bid to stimulate sluggish growth in the 19 nations that share the euro currency.
The decision to raise rates puts the ECB in the company of other major central banks which have, with the notable exception of the Bank of Japan, moved to tighten monetary settings in a bid to quell soaring inflation….