ECB increases interest rates to all-time high

Economists, traders expect hike to be the last in current tightening cycle

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The European Central Bank raised interest rates for the 10th consecutive time to choke inflation out of an increasingly feeble economy, a move investors are betting may be the last in this tightening cycle.

In the most finely balanced decision since they began lifting borrowing costs last year, officials increased the deposit rate by 25 basis points to a record 4% and said the new level of constriction will make a "substantial contribution" to bringing inflation under control.

Both economists and traders have deemed this to be the likely peak in the currency region's most aggressive monetary tightening cycle to date.