Trichet defends interest rate rise

European Central Bank president Jean Claude Trichet is insisting that today's interest rate hike does not spell the start of a series of increases.

European Central Bank president Jean Claude Trichet has defended today's interest rate hike, saying that it does not spell the start of a series of increases.

The bank upped its key lending rate by a quarter of 1% earlier, a move set to hit around 600,000 Irish home owners, and those with personal loans or credit card debt.

Trichet said that the ECB had to act to curb inflation in the eurozone.

"It’s good for the EU as a whole that we have these well-anchored inflation expectations," he said.

"It’s good for confidence, which benefits all, including of course those who have the most difficulties at present."

Already Bank of Ireland and ICS Building Society have confirmed that they will be passing the full rate hike on to tracker customers and those signing for new fixed rate deals from next Wednesday.