A sharp rise in short-term interest rates in the eurozone has stoked fears of the region’s fragile economic recovery stalling after a rush by banks to repay loans to the European Central Bank drove up borrowing costs.

Several benchmark interest rates in money markets, where banks and companies access crucial short-term finance, have spiked since the beginning of December, threatening to raise the cost of credit for individuals and companies.

One month euribor is at its highest level since mid-2012, excepting seasonal variations, after rising by more than a fifth over the period to 0.208 per cent. Similarly, the eurozone’s key overnight interest rate, Eonia, rose by a third to 0.153 per cent and the weekly rate increased by nearly a half to 0.174 per cent