The European Central Bank (ECB) has raised interest rates for the first time in more than 11 years because it tries to control the soaring Euro zone inflation.
The ECB increased its main interest rate by 0.5 points to 0.0% and planned a further increase this year.
The level has been negative since 2014 in an effort to improve the regional economy after years of weak growth.
But the consumer price rose at a record of 8.6% in 12 months to June due to the cost of food, fuel and energy soaring.
It is far above the target of 2% of the bank.
That happened after the Bank of England and the Federal Reserve as also set their tariffs to try and control price increases.
Inflation is the speed where prices rise. For example, if a bottle of milk costs € 1 and increases 5 cents compared to the previous year, the milk inflation is 5%.
The US has made the biggest increase in interest rates since 1994
Fuel, milk, and eggs encourage British inflation to the highest level of 40 years
Why is the price rising so fast?
Ukraine War and Covid supply chain problems have increased daily costs around the world, putting pressure on the household.
The euro zone is vulnerable because it is very dependent on Russia because of its oil and gas. This week urged member countries to start the rationing inventory in the midst of Moscow's concerns that it will stop the delivery of gas this year, causing further price surge.
Explaining his decision to raise interest rates, ECB President Christine Lagarde said: "Economic activity [in the Euro Zone] slows. Russian aggression that cannot be justified against Ukraine is a barrier to sustainable growth.
"We hope that inflation remains high that is not desirable for some time due to sustainable pressure from the price of energy and food and pipe pressure in the price setting chain," he added.
The bank says further interest rate increases "will be appropriate" and that it will take the "meeting after meeting" to raise interest rates.
However, there are concerns about how higher loan costs will affect European countries that are very indebted, including Italy and Greece.
Analysis
Senior Presenter of World Service Victoria Craig
Optimism and concern. Two truly opposite emotions that have a tight grip in young Greek adults.
Many people who have lived half or almost all of their lives in a crisis fashion say they are not optimistic about their future in this country.
Some have a lot of jobs to meet their needs and pay their way through school.
While in previous years that might barely get it, the surge in food prices and red energy - exacerbated by war in Ukraine - only made things worse.
Thousands of people just gave up.
One of the estimates of the London School of Economics shows that around 400,000 title holders have left Greece since 2010. The pattern described as the disposal of the brain - when a very skilled worker brings their expertise to another beach.
But not all hopes are lost, and not all pessimistic.
Although the unemployment rate of youth is above 36% in April - the highest in the Euro zone, the tariff is much lower than that peaked in 2013 - at 58.2% - during the peak of the Greek debt crisis.
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