European Central Bank hikes rates again to 22-year high – with more in the pipeline 

The European Central Bank (ECB) has raised interest rates in the single currency bloc to a 22-year high as it stepped up the battle against inflation.

It increased benchmark borrowing costs in the 20-nation bloc by 0.25 percentage points, 3.5 per cent – the highest level since 2001 – in a bid to control the eurozone’s inflation, which is at 6.1 per cent, more than three times the 2 per cent target. 

The bloc is in recession, led by a downturn in Germany, which was once the single currency’s powerhouse economy but is now seen as ‘the sick man of Europe’.

Rate hike: The European Central Bank increased benchmark borrowing costs in the 20-nation bloc by 0.25 percentage points to 3.5% – the highest level since 2001

ECB president Christine Lagarde said further rises would be needed. ‘Inflation has been coming down but is projected to be too high, for too long.

‘Key rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to the 2 per cent medium-term target and will be kept at those levels for as long as necessary.’

It came after the Federal Reserve left interest rates in the US unchanged on Wednesday following ten successive hikes.