ECB raises eurozone interest rate despite banking sector fears

Half-point rise comes as European markets recover from sell-off following Credit Suisse crisis

The European Central Bank has raised interest rates across the eurozone by 0.5 percentage points, despite fears that higher borrowing costs could set off a domino effect across the financial sector amid fears about the stability of Credit Suisse.

Officials at the ECB, the central bank covering the 19-member euro-bloc, said inflation was likely to remain high “for too long”, forcing it to continue with its planned run of increases and lift its main rate to 3.5%.