Frankfurt, June 6:

The European Central Bank was meeting here on Wednesday on its key interest rates which were widely expected to rise for the eighth time in 18 months, just as a three-day G8 summit began.

The ECB’s rate-setting governing council, meeting on Wednesday instead of the normal first Thursday of the month owing to a public holiday, was unanimously expected to raise its benchmark “refi” refinancing rate by a quarter of a per centage point to 4 per cent, the highest level for more than five and a half years.

The bank has raised eurozone borrowing costs a total seven times since December 2005, each time by a quarter of a per centage point, in a bid to keep inflation in the 13-country eurozone in check. The last move was in March.

But ECB President Jean-Claude Trichet has carefully primed the markets for an additional rise to 4 per cent this month, when the meeting coincides with the start of the G8 summit in Heiligendamm, north east Germany.