In summary then, the economy is continuing to grow at a modest pace, in the face of considerable adjustment challenges. It has apparently been generating more employment growth and lower unemployment than we expected, while inflation has remained quite low. Turning then to the rest of the world, there have been some key developments since we last met with the Committee.
One reason for this was the rise in US capital market rates, which caused our foreign currency reserves to lose value. Another reason was the rise in euro area policy rates. 5/7  BIS - Central bankers' speeches  The Eurosystem's interest rate increases are necessary in order to combat the high inflation.