EURO AREA: ECB raises interest rates to 4.25 percent

ECB raises interest rates to 4.25 percent Higher interest rates can help contain inflation but some worry the bank could slow economic growth by raising rates too much. European Central Bank president Jean-Claude Trichet. Photo: EFE The European Central Bank has raised interest rates for the first time in more than a year to combat escalating inflation in the 15 countries that use the euro. The bank says it is increasing its key rate by a quarter point to 4.25 percent. Higher interest rates can help contain inflation but some worry the bank could slow economic growth by raising rates too much. Bank president Jean-Claude Trichet is expected to explain the decision when he meets with reporters later in the day. Trichet has stressed recently that his main objective is to keep prices stable. But he has also suggested that... [read full story]