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Rise takes Eurozone rates to 7-year high
(Agencies)
Updated: 2008-07-04 11:46

Eurozone interest rates hit a seven-year high on Thursday but markets were relieved by a less-hawkish tone from the European Central Bank, which damped fears of further rises to come.

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The ECB comments prompted a fall in the value of the euro against the dollar and helped pare back slightly the earlier record high oil price of $145.85 a barrel. It also contributed to a modest recovery in European and US equity markets, which were also relieved by the publication of American jobs data less gloomy than had been feared.

The ECB's fight against inflation, which led to the quarter-point rise in the main interest rate to 4.25 per cent, received powerful backing from Germany when Peer Steinbrück, the finance minister, told the Financial Times that he had “full respect” for its decision.