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Interest rates in the eurozone rose again. The European Central Bank pushed its benchmark rate to 2.5%, the second increase this year, as the bank works to slow the price pressures moving through the bloc's economy.
Along with the rate decision, the ECB cautioned about what it called "upside risk" to inflation, meaning the bank's own analysis points to a real chance that prices climb further than its current forecasts expect.
The benchmark rate is what the ECB charges commercial banks to borrow money; it sets a floor for rates across the wider economy.
When the ECB raises it, the cost of borrowing climbs for businesses and households alike: mortgages become more expensive, corporate loans tighten, and consumer spending slows. That cooling effect is the point.
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