ECB raises interest rates by 0.5%

The European Central bank has raised interest rates in the Eurozone again by half a percentage point.

Earlier The Bank of England also raised its interest rate from 3.5% to 4%. It was already at its highest level for 14 years. 

The ECB also announced it would raise rates again in March by a further 0.5%.

 The ECB began raising rates in July to control inflation which hit 8.5% in the 20 countries using the euro in January. 

The bank said it would: "Stay the course in raising interest rates significantly at a steady pace and in keeping them at levels that are sufficiently restrictive to ensure a timely return of inflation to its 2% medium-term target."

"Keeping interest rates at restrictive levels will over time reduce inflation by dampening demand and will also guard against the risk of a persistent upward shift in inflation expectations."

ECB interest rates are now in a range between 2.5% and 3.25%, the highest since November 2008.