LUXEMBOURG, Dec 2: ECB president Jean-Claude Trichet on Friday defended the European Central Bank’s controversial move to lift interest rates by a quarter per centage point as a “good decision”.

I think that the decision of yesterday was a good decision, Trichet told reporters at a conference in Luxembourg.

The Frankfurt-based central bank raised its key interest rates for the first time in five years on Thursday, putting up its benchmark “refi” rate by a quarter of a point to 2.25 per cent.

The widely expected decision was fiercely criticised by eurozone politicians, business leaders, unions and economists as jeopardising a still fragile recovery.

Defending the ECB’s action, Trichet said the rate increase would help boost consumer and business confidence in the eurozone.

However, he declined to comment on prospects for a further rate increase.

Although Luxembourg Prime Minister Jean-Claude Juncker, who chairs regular meetings of eurozone finance ministers, spoke out against the rate hike prior to its official announcement, he struck a less critical tone on Friday.

Juncker, who is also Luxembourg’s finance minister, said the rate hike “which could have been higher, will not hamper euro zone growth.”—AFP