ECB hikes interest rate despite Portuguese woes

The European Central Bank hiked interest rates Thursday for the first time in nearly three years to tame rising prices just as the eurozone debt crisis claimed Portugal as its latest victim.
The increase in the ECB's benchmark refinancing or "refi" rate to 1.25 percent was the first since July 2008 and the first change either way since it was cut to a record low of 1.0 percent in May 2009.
Despite financial problems faced by peripheral members Greece, Ireland and Portugal, the ECB sent a message to markets that price stability, rather than debt worries, is its top priority.
With inflation now at 2.6 percent and likely to climb even further above its less than 2.0 percent target, the ECB's governing council decided to act ahead of its peers the US Federal Reserve, the Bank of England or the Bank of Japan.