ECB hikes key interest rate to 1.25%, Bank of England holds key interest rate at 0.5%

FRANKFURT – THE European Central Bank is raising its main interest rate by a quarter of a percentage point to fight inflation despite the debt problems afflicting Portugal, Greece and Ireland.

The key refinancing rate is going up to 1.25 per cent from a record low of 1 per cent.

LONDON – THE Bank of England has held its base lending rate at an all-time low of 0.5 per cent, as analysts expected, despite mounting concerns about high inflation.

The Bank’s Monetary Policy Committee on Thursday also announced no new funding for its economic stimulus program of asset purchases, known as quantitative easing.

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