ECB raises rates to 2.50% as euro-area energy inflation hits 14.3%

The European Central Bank raised rates for the second time this year after higher energy prices pushed euro-area inflation further above its target. The increase came as the energy shock spread across major economies, with attacks forcing Saudi Arabia to close the principal pipeline used to bypass the Strait of Hormuz. US consumer and producer inflation also remained elevated, adding to uncertainty over the next round of central bank decisions.

The week also brought a potentially important step in European bank consolidation as UniCredit authorised the shares required for its Commerzbank offer. In Asia, China recorded another large trade surplus and directed financial institutions away from scale-driven expansion, while Malaysia attracted record foreign bond inflows and India's foreign-exchange reserves reached an all-time high.