What are interest rates? How do they work? And what do higher rates mean for people, the economy and inflation?Our host, Katie Ranger, puts these questions to expert Gabriel Glöckler on The ECB Podcast.The views expressed are those of the speakers and not necessarily those of the European Central Bank.Published on 23 July 2022 and recorded on 13 July 2022 and 22 July 2022.In this episode:What interest rates are and why we need them to compensate for different risks.The role interest rates play in determining the everyday choices we make with our money and how the ECB’s decisions affect market interest rates.Why it’s important that our monetary policy decisions reach all parts of the euro area in a reasonably even manner.The concrete impact of higher rates on people’s daily lives and on economic activity, and how raising rates can help bring down inflation.The challenges the current environment poses for interest rates and the role higher rates play in shaping people’s inflation expectations. The importance of signalling our commitment to normalising our monetary policy.Additional material:Press release: monetary policy decisions, 21 July 2022https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.mp220721~53e5bdd317.en.html Our monetary policy statement at a glance, 21 July 2022https://www.ecb.europa.eu/press/pressconf/visual-mps/2022/html/mopo_statement_explained_july.en.html Explainer: We have raised interest rates. What does that mean for you?https://www.ecb.europa.eu/ecb/educational/explainers/tell-me-more/html/interest_rates.en.html Blog post by Christine Lagarde: Ensuring price stability, 23 July 2022https://www.ecb.europa.eu/press/blog/date/2022/html/ecb.blog220723~c2b1d4b654.en.htmlThe ECB Podcast: President Lagarde presents the latest monetary policy decisions, 21 July 2022https://www.ecb.europa.eu/press/tvservices/podcast/html/ecb.pod220721_episode37.en.html The ECB Podcast: What is behind current inflation spikes?, 6 October 2021https://www.ecb.europa.eu/press/tvservices/podcast/html/ecb.pod210925_episode22.en.html European Central Bankhttps://www.ecb.europa.eu/home/html/index.en.htmlYou can also listen to The ECB Podcast on SoundCloud, Spotify, Deezer, Stitcher, YouTube, Amazon Music and many more: pod.link/ecbpodcast