ECB hikes borrowing costs to combat Middle East energy shock

On Thursday, the European Central Bank raised interest rates for the second time this year to combat an energy shock driven by renewed fighting and tensions in the Middle East, which sent energy prices soaring.

Along with the rate hike, the central bank kept its inflation forecast for the current year unchanged at 3 percent while slightly increasing the projection for next year to 2.5 percent. The decision to raise borrowing costs met prior market expectations.