ECB faces dilemma over interest rate rise amid Credit Suisse crisis

European Central Bank could opt for smaller increase as concerns spread over health of banking system

The European Central Bank is facing a dilemma over whether to push ahead with its plans for a large interest rise on Thursday amid fears over the strength of the banking system after Wednesday’s heavy sell-off of the Swiss banking giant Credit Suisse.

After raising interest rates since last summer at a record pace to tackle high inflation across the eurozone, the ECB had effectively committed to another 0.5 percentage point increase in borrowing costs this week.