The European Central Bank (ECB) increased its key interest rates by 25 basis points, marking the first rate hike in almost three years. This decision comes as the ECB attempts to curb persistently high inflation across the Eurozone. The move signals a shift in the bank’s monetary policy, moving away from years of ultra-low or negative rates. While the precise impact remains to be seen, the increase is expected to make borrowing more expensive for businesses and consumers. The ECB also announced a new tool to address fragmentation risk within the Eurozone, aiming to prevent borrowing costs from diverging too widely between member states. Further rate hikes are anticipated in the coming months, though the pace will depend on evolving economic data and the inflation outlook. This action reflects growing concerns about the economic consequences of unchecked price increases.