Euro interest rates rise

FRANKFURT, Germany, March 8 (UPI) -- The European Central Bank raised a key interest rate a quarter-point to 3.75 percent Thursday, affecting the 13 countries using the euro as their currency.

Separately, the Bank of England left its official bank rate unchanged.

The ECB increased its key refinancing minimum-bid rate, even though "euro zone" inflation is 1.8 percent -- below the central bank's 2 percent target.

But the bank is said to be was concerned about rising wages, particularly in Germany.

In London, the Bank of England left the lending rate it charges to commercial banks at 5.25 percent, the bank's monetary policy group said without comment.

The bank had raised rates three times since August -- most recently in January -- as it sought to combat inflation, which surged to a decade-high of 3 percent in December, well above the bank's 2 percent target.

British inflation fell faster than expected to 2.7 percent in January.

Some analysts say euro zone borrowing costs may hit 4 percent and British rates may hit 5.5 percent, within three months.