ECB Raises Interest Rates Again, Trims Bank Subsidies

A commuter train passes by the skyline with its financial district ahead of the European Central Banks (ECB) governing council meeting later this week in Frankfurt, Germany, on Oct. 25, 2021. Kai Pfaffenbach/Reuters

FRANKFURT—The European Central Bank raised interest rates again on Thursday and signaled it was keen to start shrinking its bloated balance sheet, taking another big step in tightening policy to fight off a historic surge in inflation.

Worried that rapid price growth is becoming entrenched, the ECB is raising borrowing costs at the fastest pace on record, with further hikes almost certain as unwinding a decade’s worth of stimulus will take it well into next year and beyond.