The European Central Bank has raised its key interest rate to 2.50% in response to a strengthening eurozone economy and fears of growing inflation.
The quarter-point rise from 2.25% is the second in four months after the bank held rates steady for more than two years.
Last month, ECB President Jean-Claude Trichet said the bank would remain "vigilant" on inflationary pressures.
He the ECB had to ensure economic growth did not affect price stability.
Persistently high oil prices have posed the most significant threat to inflation.
The eurozone's economic outlook for 2006 is mixed, but some of its largest economies, including France and Germany, are expected to gain momentum.
In its last forecast, the ECB predicted economic growth of 1.9% across the 12-member eurozone bloc compared with 1.4% last year.
(BBC)
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