New Delhi, June 12 -- The European Central Bank did on Thursday what it had not done in nearly three years, and what its own forecasts say it can ill afford: it raised interest rates. The deposit rate went up a quarter point to 2.25 percent, CNBC reported, the first increase since 2023, and the central bank was candid about the reason. It is not European demand running hot. It is a war on the other side of the world.

tightening against inflation you cannot tame while the growth you are sacrificing was already gone.

Christine Lagarde made no pretense about the source. The war in the Middle East is generating inflation pressures, the ECB president told reporters in Frankfurt, calling the decision to raise rates robust across a range of sc...