The European Central Bank on Thursday raised its key interest rate by a quarter point, to 2.5%. This is the highest level in more than a year.
The decision was made amid growing inflationary pressure caused by the war in the Middle East. The conflict began after US and Israeli strikes on Iran in February, which sharply drove up global energy prices.
This week the price of a barrel of Brent crude exceeded 100 dollars. European natural gas prices have more than doubled compared with pre-war levels.
"The conflict in the Middle East continues to generate inflationary pressure," ECB President Christine Lagarde said at a press conference in Berlin.
This is already the second rate increase since the start of the conflict. The eurozone's central bank, covering 21 countries, is seeking to curb price growth.
Central banks around the world are now under pressure: the US Federal Reserve, the Bank of England and the Bank of Japan are considering similar steps. Bond markets are showing strain from growing deficits and debts.
How will this decision affect the eurozone economy in the coming months?
The next rate meetings at other major regulators will take place as early as next week.
