ECB raises benchmark rate to 4.25 pct

The European Central Bank raised its benchmark interest rate today by a quarter percentage point to 4.25 percent in an effort to contain the escalating inflation in the 15-nation euro zone.

Bank president Jean-Claude Trichet is expected to explain the decision at a news conference, with attention focusing on whether more increases are coming.

Trichet has stressed that his main objective is to keep prices stable, and all but promised an increase this month at last month's meeting. But he has also suggested that repeated interest rate hikes are probably not likely.

(source: George Frey, AP Business Writer)