ECB raises interest rate

The European Central Bank (ECB) has raised interest rates to 1.5 [er cent from 1.25 per cent in a bid to stifle inflation rises in the eurozone.

The rise was widely expected after ECB president Jean-Claude Trichet indicated last month that such a move was likely.

Despite debt problems facing some smaller eurozone nations, the ECB is worried about overheating in economies such as Germany.

Eurozone inflation is running at 2.7 per cent.