Gary Duncan, Economics Editor The European Central Bank (ECB) today defied deepening gloom over the eurozone's economic prospects and intense political pressure when it pressed ahead with a rise in interest rates to their highest level for almost seven years. The Frankfurt-based central bank raised rates by a quarter-point to 4.25 per cent, after Jean-Claude Trichet, the ECB’s President, sounded a warning on Wednesday that eurozone inflation could “explode” without decisive action. The increase was the first by the ECB for a year, and took rates to a level last seen in September 2001, before a long series of cuts in the wake of the September 11 terrorist attacks on the US. The hardline verdict from the ECB’s Governing Council against pleas to hold fire from European leaders led by President Sarkozy of France came after a jump...
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