ECB raises rates to 1.5%

The European Central Bank has hiked its benchmark interest rate to 1.5% as expected.

The ECB, which has already raised rates once this year, opted for a second increase to quell inflation which remains above target. It said in a statement: "The interest rate on the main refinancing operations of the Eurosystem will be increased by 25 basis points to 1.50%." The move was widely expected after President Trichet signalled last week the ECB would be "vigilant" on price increases. The ECB's aims to keep the annual inflation rate below 2%, but June's figures showed it was at 2.7%, despite the first rate rise in April. Rathbones head of Multi-Asset, David Coombs, said ...