8 Jul 2011

Interest rates raised by ECB

9:03 am on 8 July 2011

The European Central Bank has raised interest rates to 1.5% from 1.25% in an effort to curb inflationary pressures.

Euro zone inflation remained at 2.7% in June - softer than expected, but well above the bank's target of just under 2%.

The increase was the second rise since April.

ECB president Jean-Claude Trichet said inflation would be monitored very closely,

The BBC reports this was seen as a signal that rates are likely to rise further.

The rise was widely expected after Mr Trichet indicated last month that such a move was likely.

Earlier on Thursday, the Bank of England kept rates in Britain at a record low of 0.5%. Rates have been held at this level for more than two years.