European Central Bank raises interest rates for first time in 11 years

The European Central Bank on Thursday raised its interest rates by 0.5%, Report informs, citing DW.

The hike is the first in over a decade on Thursday as consumer prices in the eurozone rose at an 8.6% annual pace in June.

The ECB targets an inflation rate of 2% as its maximum, but had been keeping its interest rates to historic lows in a bid to encourage growth in an economy battered by several national debt crises, the COVID pandemic, and now, Russia's invasion of Ukraine.

The US Federal Reserve and the Bank of England have already taken action to curb inflation, raising interest rates earlier and in a more extreme fashion than is likely to be seen from the ECB.

The euro's recent plunge to two-decade lows against the US dollar also complicates inflation pressures.