Middle East war is hurting eurozone economy, warns ECB, after announcing first interest rate rise since 2023 – as it happened

European Central Bank has lifted interest rates and warned that the war in the Middle East is generating inflation pressures

The financial markets are surprisingly calm this morning, as conflict erupts again in the Middle East.

European stock markets are mostly higher this morning, while the oil price is now slipping back.

As has often been the case during the Iran conflict, the UK’s flagship index has found support from its collection of energy companies and more traditionally defensive names. Miners and other China-linked stocks were lifted by data suggesting the country is investing heavily in AI and consuming raw materials at a healthy rate.

Selling in AI-related stocks, of which London has very few, put shares on Wall Street under pressure yesterday and that’s extended to Asia today.