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Eurozone raises interest rates for first time in 11 years - Perthshire Chamber of Commerce

Eurozone raises interest rates for first time in 11 years

The European Central Bank (ECB) has raised interest rates for the first time in more than 11 years as it tries to control soaring eurozone inflation.

The ECB increased its key interest rate by 0.5 percentage points to 0.0% and plans further hikes this year.

The rate has been negative since 2014 in a bid to boost the region's economy after years of weak growth.

But consumer prices rose at a record 8.6% in the 12 months to June as food, fuel and energy costs soared.

That is well above the bank's 2% target.

It comes after the Bank of England and the US Federal Reserve also put up their rates to try and rein in rising prices.

The Ukraine war and Covid supply chain issues have driven up everyday costs across the world, putting pressure on households.

The eurozone is vulnerable because it relies heavily on Russia for its oil and gas. This week it urged member states to begin rationing supplies amid fears Moscow will halt gas deliveries this year, causing further price spikes.

FROM SCC NETWORK

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