Policymakers at the European Central Bank have decided to raise its key interest rates by 0.75 percentage points to cool inflation, the sharpest hike since the bank was founded in 1998.

Members of the ECB's Governing Council met in Frankfurt, Germany, on Thursday. They discussed the eurozone's economy and inflation, which hit a record high of 9.1 percent last month.

The policymakers decided to tackle soaring prices by raising the main refinancing rate to 1.25 percent from the current 0.5 percent and the deposit rate to 0.75 percent from zero percent.

The 0.75 percentage-point rise is unprecedented for the ECB, which normally changes rates by a quarter point. The move was the second consecutive rate hike following the council's previous increase at its monetary policy meeting in July.

The ECB said in a statement that over its next several meetings, the council "expects to raise interest rates further to dampen demand and guard against the risk of a persistent upward shift in inflation expectations."

The ECB has joined central banks in other parts of the world, including the US Federal Reserve, in steeply raising key rates to curb inflation.

Their stances are in stark contrast to the Bank of Japan's massive monetary easing program. Analysts say the Japanese yen may further lose its value against other currencies.