The European Central Bank (ECB) on Thursday raised interest rates by 0.25% to 1.25%, which had been expected for some time. It took the action in an effort to fight inflation throughout the 17-country euro zone, after hinting for some time that it would do so at its next meeting. It was the first rate increase since July of 2008.
Earlier, the Bank of England (BOE) maintained interest rates at a record-low 0.5%, despite inflation running at 4.4%, which is more than double the target amount. The concern by the BOE was that raising rates would snuff out any potential recovery.
Reuters reported that the ECB also increased its deposit rate by 25 basis points, and its marginal lending rate as well; the former now stands at 0.50% and the latter at 2.0%.