The European Central Bank (ECB) on Thursday raised the benchmark interest rate by 0.25 percentage points to 4.25 percent amid inflation concerns.

The ECB last raised its benchmark refinancing rate in June last year, so it was the first time in more than a year that the ECB raises interest rates again which is expected by analysts.

A possible rate hike this month was hinted by ECB President Jean-Claude Trichet on June 5 to secure the solid anchoring of inflation expectations.

The act of the ECB is to fight against the inflation of the euro zone which rose 4 percent last month, double the bank's medium-term goal.