IRISH homeowners and businesses were bracing themselves for the anticipated European Central Bank rate hike today.
The decision to push up the rate was being made by the ECB's 23-strong governing council in Frankfurt around 1pm.
The expected 0.25pc interest rate rise follows a prolonged period of inflation in the eurozone.
But the first increase in nearly three years couldn't come at a worse time for us, with crippled banks, and borrowers already stretched to the maximum due to high unemployment and weak economic growth.
Ireland will be concerned that higher interest rates could discourage consumer spending and deepen our recession, but the ECB's clear view is that rising inflation must be tackled.
It is expected that this rise will be the first in a sequence of increases as the ECB senses that the worst of the economic crisis is over.
Analysts anticipate a rise of 0.25pc each quarter into next year.
Almost three-quarters of Irish companies expect to be hurt by higher European Central Bank interest rates.
A KBC Bank/Chartered Accountants of Ireland's quarterly business sentiment survey showed that of the 73pc of companies expecting to be hit by rate hikes. "Many significant 'headwinds' to recovery remain in place," Austin Hughes, chief economist at KBC Bank Ireland said.