Eurozone interest rates raised to 1.25% by ECB

The European Central Bank has kept rates low for almost two years

Eurozone interest rates have been raised to 1.25% from the record low of 1% by the European Central Bank (ECB).

Interest rates had been held at 1% for just under two years following the financial crisis and global recession.
ECB president Jean-Claude Trichet said that the rate rise was in response to the risk of accelerating inflation, and added that rates were still very low.
He called the decision a "balancing act", amid concern the move worsens debt problems for Portugal and others.
One-size-fits-all "The hike is unwelcome for peripheral countries, but arguably the core member states were in need of this move already some time ago," said Mr Trichet in a nod to the differing economic fortunes of the eurozone members.
"In that sense, the timing of the increase is a balancing act, which is part and parcel of the one-size-fits-all monetary policy."
Germany has enjoyed a strong rebound in growth, led by an export boom.