Interest rates hiked to 2.5% ‘on back of fears of rising inflation’

THE president of the European Central Bank, Jean Claude Trichet, said interest rates were hiked to 2.5% on the back of fears of rising inflation.

Speaking in Frankfurt, Mr Trichet said the “adjustment” upwards of interest rates will contribute to ensuring that medium to long-term inflation “remain solidly” at existing levels and support the continuing recovery of the economy.

Eurozone interest rates rose for the first time in four years last December, though he said they “still remain at very low levels in both nominal and real terms.”