Higher ECB rates helped squelch Europe’s outbreak of inflation in the wake of the pandemic and Russia’s invasion of Ukraine. Higher central bank benchmarks influence borrowing costs throughout the economy, making it more expensive to borrow and spend, and thus taking pressure off prices.

The European Central Bank (ECB) is poised to announce its last interest rate cut of the year on December 12. Analysts expect the cuts will be modest, at 25 basis points, down from earlier speculation of a larger 50-basis-point move.