The ECB has lifted its main interest rate to the highest in more than a decade to tackle record inflation in the eurozone, which stood at 9.9% in September.

Borrowing and repaying debt will now be more expensive in the 19 countries using the euro.

The increase had been expected by economists as the central bank battles to bring inflation down to its 2% target.

The deposit interest rate has doubled to now 1.5%.

Thursday's rate hike was the third one this year as the ECB already raised rates at the fastest pace on record. Rates rose 0.5% in July and 0.75% in September.

Unlike the September hike, it's understood no ECB policymaker opposed the latest increase.

The ECB is just one of the western central banks ramping up rates. It follows similar moves by the Bank of England and the US Federal Reserve (known as the Fed) who are all fighting to bring down inflation.

The ECB is following in the steps of the Fed who imposed its third major interest rate rise in a row and hiked rates by 0.75 percentage points in an effort to curb soaring US inflation.

Similarly, last month the Bank of England raised the UK interest rate to 2.25% - the highest level since the 2008 financial crisis.

Markets had priced in the predicted policy move and European shares fell in advance on Thursday morning.

Markets are also predicting further hikes. A survey of economists has shown that the deposit rate is expected to reach 2.5% by next March.

The move has been made despite a call from the UN not to increase interest rates.

United Nations Conference on Trade and Development (UNCTAD) had called on central banks not to increase interest rates and warned that a recession, worse than that experienced after the global financial crisis, could result from monetary regulators tightening policy and hiking interest rates.

Recession may already be in Europe, said Daniel McCormack, a managing director at global financial services group, Macquarie Asset Management.
"This week's PMI [purchasing managers index] data, which is usually a good barometer for the economy's overall health, suggests the Euro area economy probably entered recession earlier this quarter."

"The sharply downgraded growth forecasts the ECB released just last month already look out of date and too optimistic ... We expect the ECB will likely raise rates by another 100bps [basis points] in the next few months, pushing policy firmly into restrictive territory."

Rising EU borrowing costs have been met with displeasure from some politicians including the new Italian Prime Minister Giorgia Meloni.