All rates rise by 50 basis points
Inflation to stay 39;undesirably39; high
ECB backs 39;antifragmentation39; tool called TPI
ECB 39;can go big39; on that, Lagarde says

FRANKFURT, July 21 Reuters The European Central Bank raised interest rates by more than expected on Thursday as concerns about runaway inflation trumped worries about growth, even while the euro zone economy is suffering from the impact of Russia39;s war in Ukraine.

The ECB raised its benchmark deposit rate by 50 basis points to zero percent, breaking its own guidance for a 25 basis point move as it joined global peers in jacking up borrowing costs. It was the ECB39;s first rate increase in 11 years.

Policymakers also agreed to provide extra help for the 19country currency bloc39;s more indebted nations Italy among them with a new bond purchase scheme intended to cap the rise in their borrowing costs and so limit financial fragmentation.

Ending an eightyear experiment with negative interest rates, the ECB also lifted its main refinancing rate to 0.50, and promised more hikes, possibly as soon as its Sept. 8 meeting with more to follow later.

ECB President Christine Lagarde said a clear deterioration of the inflation outlook and unanimous backing for the antifragmentation instrument justified the bigger move.

Price pressure is spreading across more and more sectors, Lagarde said. We expect inflation to remain undesirably high for some time. She listed driving factors including higher food and…