Interest rate up for first time in 11yrs

ECB makes 0.5% hike to tackle soaring inflation

-  DAVID McHUGH

THE European Central Bank has raised interest rates for the first time in 11 years by a larger-than-expected amount.

It is joining steps already taken by the US Federal Reserve and other major central banks to target high inflation.

The move raises new questions about whether the rush to make credit more expensive will plunge major economies into recession at the cost of easing prices for people spending more on food and fuel.

The ECB’s surprise hike of half a percentage point for the 19 countries using the euro currency is expected to be followed by another increase in September, possibly of another half a point.