Eurozone interest rates reach joint record high

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The European Central Bank (ECB) has raised interest rates in the eurozone once again, taking its key rate to a record high last seen in late 2000.

The bank raised the deposit rate in the 20-nation bloc for the ninth time in a row - to 3.75%, up from 3.5%.

The ECB said inflation continued to ease, but was still expected to remain "too high for too long".

On Wednesday, the US central bank raised rates to their highest level in 22 years in its bid to control prices.

In the UK, where inflation fell to 7.9% in June, the Bank of England's base rate is at 5%, At its next decision on 3 August, the Bank is widely expected to raise rates to 5.25%.

The idea of raising rates is to make the cost of borrowing more expensive and so decrease demand and make price rises more difficult to pass on.

 

As in other regions, the eurozone has been hit by rising food and energy prices that have weighed on households.

Inflation in the eurozone is running at 5.5%. Food price inflation has continued to slow but was still at 11.6% in June.

 

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