Your Friday Briefing
Officials hope the move will be a powerful tool to help control rapid inflation, and the central bank described it as an effort to “front-load” its rate increases. And in a sign of investor confidence, European stocks ended the day roughly where they started.

Financial context: Last week, the euro fell to parity with the dollar for the first time in 20 years. That added to the bloc’s inflationary pressures because the lower currency value increased the cost of imports. Concern is growing that the bloc will enter a recession.

Global context: The increase follows similar measures taken by the U.S. Federal Reserve and dozens of other central banks this year. The world’s outlook has worsened in recent months, as pandemic-induced disruptions and the war in Ukraine have continued to disrupt supply chains.

Resources: Here are answers to questions you may have about what causes inflation and how interest rate increases — which make it more expensive to borrow money — can help fight it.