The European Central Bank (ECB) ended a long-running stimulus scheme on Thursday and said it would deliver next month its first interest rate hike since 2011, followed by a potentially larger move in September.

With inflation at a record-high 8.1 percent and still rising, the ECB now fears that price growth is broadening out and could morph into a hard-to-break wage-price spiral, heralding a new era of stubbornly higher prices.

The central bank for the 19 countries that use the euro said it would end quantitative easing on July 1, then raise interest rates by 25 basis points on July 21. It will then hike again on September 8 and go for a bigger move, unless the inflation outlook improves in the meantime.

"We will make sure that inflation returns to our 2 percent target over the medium term," ECB President Christine Lagarde told a news conference. "It is not just a step, it is a journey," she said of the moves signaled on Thursday.

The rapid rise in inflation was driven initially by energy and food prices as economies emerged from COVID-19 lockdowns but Russia's invasion of Ukraine has accelerated those trends and even underlying inflation is now at twice the ECB's target.

The size of rate hikes has been intensely debated by ECB policymakers, with Chief Economist Philip Lane preferring 25 bp moves in July and September but others arguing for 50 bps to be considered.

Supporting their case, the ECB raised its inflation projections once again, to 6.8 percent for this year versus a previous forecast of 5.1 percent. It sees inflation at 3.5 percent in 2023 and 2.1 percent in 2024, which would be a fourth straight year of overshooting.

Lagarde said that was too high and that similar projections three months from now would require quicker rate hikes.

"If you are at 2.1 percent in 2024 or beyond, then the increment of the adjustment will be higher? The answer is yes," Lagarde said.

A 50 basis point hike, the logical next increment, would be the ECB's largest one-off rate increase since June 2000. At minus 0.5 percent, the ECB's deposit rate has been in negative territory since 2014.