ECB defies market turmoil with significant interest rate increase.

The European Central Bank has raised interest rates by 0.5% despite "financial market tensions" and signs of stress in the banking system. The move is part of the bank's aggressive battle against inflation, which remains high across the European Union. The ECB's policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed. The bank anticipates inflation will average 5.3% this year and won't fall close to its 2% target until 2025. The big question is whether the Federal Reserve will follow a similar path next week when officials meet in the face of the Silicon Valley Bank collapse.