ECB keeps rate hike pledge, raises rates by 50 basis points

The European Central Bank raised interest rates as promised by 50 basis points today, sticking with its fight against inflation and facing down calls by some investors to hold back on policy tightening until the turmoil in the banking sector eases.

A rout in global markets triggered by last week's collapse of Silicon Valley Bank and made worse by doubts around the future of Switzerland's Credit Suisse had prompted some to question whether the ECB would pause its rate-hiking cycle.

The central bank for the 20 countries that share the euro lifted its deposit rate to 3 per cent - the highest level since late 2008 - as inflation is seen overshooting its 2 per cent target through 2025.