ECB increases interest rates by quarter-point as Iran war fuels European inflation

ECB's governing council decision marks the first interest rate hike in almost three years as policymakers try to bring inflation down to its 2% target

A euro symbol statue at the headquarters of the European Central Bank. Picture: Bloomberg

The European Central Bank (ECB) has decided it can no longer ignore the monetary bloc's upswing in inflation, hiking its key interest rates for the first time in almost three years.

Following more than three months of war in Iran and soaring oil prices, the ECB raised its interest rates by a quarter-point to 2.25%, making it the first major central bank to respond to the ongoing conflict.