It is the bank's first rate hike in more than a year, The Wall Street Journal reported.

The bank said the hike of 25 basis points would go into effect July 9. It would also apply a quarter of a percentage point raise to its marginal lending facility, raising that rate to 5.25 percent, and its deposit facility, raising that rate to 3.25 percent.

European Central Bank President Jean-Claude Trichet was to meet with the media Thursday to explain the Governing Council's decisions, a statement said.

Trichet signaled the rate hike was possible a month ago. "It is our strong determination to secure a firm anchoring of medium and long-term inflation expectations in line with price stability," he said in June.