European Central Bank outpaces US Fed with half-point hike

By DAVID McHUGH
AP Business Writer

FRANKFURT, Germany (AP) — The European Central Bank has gone big again, with another half-point interest rate increase. The bank on Thursday also vowed a similar hike in March. It’s aggressively raising rates to fight inflation that has slowed but is still way too high at 8.5% annually. The higher benchmarks raise the costs of credit across the economy, which should help bring down demand for goods that pushes up prices. The ECB got a later start in raising rates than the U.S. Federal Reserve and as a result is now moving faster. The Fed hiked interest rates by a quarter-point Wednesday. Like the ECB, the Bank of England also went bigger with a half-point hike Thursday.