How Data Centers Are Driving The Renewable Energy Transition

The argument could be made that data centers are a major driving force in the energy transition to renewables...Siemens

With the backdrop of a global energy crisis, it’s perhaps a good time to discuss the real energy cost of data centers, why they’ve become one of the world’s fastest-advancing industries, and how an argument could be made that they are, in fact, a major driving force in the energy transition to renewables.

Firstly, let’s consider their growth. Between 2015 and 2021, internet users have increased by 60%, and internet traffic by 440%, according to IEA data. But despite a rise in workload for data centers of 260% in the same time period, global energy use attributed to data centers has remained relatively flat, representing just a 10% increase.

Decoupling service demand from energy

This decoupling of energy usage from service demand is hugely significant. It’s being driven by rapid innovation of digital technology in data centers, allowing the industry to offset huge increases in demand with improved infrastructure efficiency.

In short, we are building more and more digital capacity, modernizing legacy infrastructure and meeting the growth, but in real terms we’re not using much more energy than we were five years ago.

The real challenge here is how we limit the environmental impact of global internet use. We should be honest; there is an impact, there always will be and we need to continue to use technology and commercial innovation to mitigate it.

Looking at the lifecycle of a datacenter, we see that more than 85% of the carbon impact today comes from operations. There is also certainly an impact during construction and it’s also significant – certainly worthy of mitigation – but net-zero construction will not address the larger part of the challenge: the carbon impact of running the facility for 20 years or more.

Driving the energy transition

Enter the concept of energy mix. A data center’s carbon performance is broadly a function of the energy mix in the location in which it’s operating. There are some exceptions, where operators take the responsibility to generate power on-site using renewables or gas, but largely speaking local grids power data centers.

The data center industry is a major buyer of PPA agreements for renewable energy, and this has a significant impact on the energy mix. In 2021, Amazon and Microsoft were the two largest corporate buyers of renewable energy through PPA; to a degree, the data center industry is helping to drive decarbonization by underwriting a significant proportion of grid-scale, carbon-free energy for industry.

This can catalyze a whole ecosystem at a national level, and also demonstrates to the broader industrial base that critical loads can reliably move to renewables.

Growing adoption of renewable energy – and higher levels of infrastructure redundancy at the IT level – are also leading to new design best practices in data centers. Battery Energy Storage Systems (BESS) are replacing diesel gensets as short-term backup power supply, for example.

With energy markets increasingly interconnected, data centers adopting BESS can generate unprecedented revenues by running in island mode in case of outages (without emitting carbon dioxide from diesel generators) or stabilizing the frequency of the grid.

Beyond carbon reduction

The quest for efficiency is as important as ever, and the discipline of energy management has a massive effect on the operational impact of a data center. Innovation in technology for managing environmental conditions inside a data center is having a significant impact on energy consumption.

We know that 20% to 40% of a data center’s energy use can go towards cooling and ventilation, and this mechanical load is a prime area for optimization through technology. White space cooling is a good example. Our technology for this – a white space cooling optimization solution – uses an advanced machine-learning model to analyze the effect of cooling on specific areas of a data center, creating an influence map to limit energy use to only what’s necessary.

AI engines like this can make a significant difference to a data center’s energy costs; it’s one of the reasons the new Greenergy data center in Estonia is the most energy efficient in the Baltic region.

Building elasticity into data center design is also a key factor in reducing the sector’s energy consumption and cost. Through intelligent design, instrumentation, control and automation, a data center can enable and disable capacity when it’s needed, rather than constantly running circuits and networks with no work to do.

In addition to preventing the over-provision of infrastructure, this is crucial at times of the year where additional capacity is needed to cover short peaks in demand. Black Friday and the Christmas period are a perfect example; with better mechanical, electrical and automation design we can dynamically reduce or increase data center infrastructure resources, enabling them to reliably run closer to their capacity for short periods of time.

The future?

Digitalization and the rise of internet access have delivered significant benefits to humanity, but we should be humble enough to acknowledge there is a sustainability impact. Our mission now is to continually and steadily drive that impact toward zero.

The data center industry has led by example by willingly investing in decarbonization, and has demonstrated that an ecosystem of technology companies can work together to measure, manage and fundamentally change an industry’s approach to energy through innovation. We must continue this pace of investment and innovation if we are to deliver the lowest possible impact of our digital lives on the environment.

Ciaran is VP and Global Head of Siemens’ Datacenter Solutions business, tasked with the continued development of Siemens as a technology provider to the….

Source: How Data Centers Are Driving The Renewable Energy Transition

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How The Shift To Adult Learning Is Changing Business

Business people learning about new project..getty

Every business is built on its human resources. Those humans have experienced unprecedented change since 2020 and, with them, the companies they work for.

Many employers are paying more, increasing benefits and adding flexibility to once-rigid scheduling to attract and retain the best talent. Meanwhile, economic uncertainties are causing other companies to rein in costs until they can ride it out. In this tug-of-war, it’s tough to anticipate which approaches can help a business move ahead of its competitors.

It’s not sound strategy to achieve growth by grinding employees down to a nub. Instead, companies should focus on building their employees themselves so they, in turn, can grow the business. Adult learning may be the perfect way to achieve this.

The shift toward helping employees bloom where they are planted is once again changing business as usual. And companies that make that shift accordingly will benefit. Here are a few reasons why you don’t want to miss out.

Adult Learning Lifts Everyone

You have probably heard the Doctor Seuss passage: “The more you read, the more things you shall know. The more that you learn, the more places you shall go.” The value of lifelong learning is virtually indisputable. But it’s no longer just about learning more on the job or reading or traveling more. It’s about adult education.

The “adult” adjective is significant here, and not just because those learning are over the age of majority. It’s used because working adults face a lot more barriers during the learning process. There is the transition back to education, the cost of it, the time needed to devote to it, and all the normal distractions of full-time jobs, kids and—maybe—a social life.

Employers have the perfect opportunity to remove some of those barriers for employees who want to further their education. If employers take advantage of it, they can grow their own talent to right-fit changing needs within their companies.

The vast majority of employees agree that access to professional development opportunities is vital. If granted access, they’re also more likely to continue working for the employer that invested in them.

Retention, engagement, job satisfaction and productivity all rise when employers actively encourage adult education. In that scenario, everyone gets to go places.

Adult Learning Is a Piece of the HR Strategy Puzzle

Automation spurred by the development of artificial intelligence and machine learning is also changing the face of business. Long-term HR strategies must consider the impact it will have on a company’s workforce. The pegs and the holes are morphing simultaneously.

It’s an almost overwhelming proposition for HR managers. They’re looking at the employee roster and seeing how many people may be made redundant by technology. At the same time, they’re looking at novel positions being created by that technology and wondering where they’ll find the talent to fill them. Adult education should be a piece of this puzzle.

Automation potential in emerging technology will change everything from sales and marketing to customer service and fulfillment. In fact, it’s already altering roles and accelerating the changes daily. Company leadership needs to peer down the road and plan accordingly.

Consider those employees whose roles will be replaced by automation. Provide the educational opportunities they need to move into newly created roles or to handle future roles the latest technological advances will demand. A savvy reskilling strategy is a great way to retain a company’s best and brightest.

Taking the long view will also transform other HR functions, such as creating job postings, recruiting, hiring and onboarding. Of course, technology has challenged the status quo since the invention of the wheel. Adult education will help companies meet the challenges today’s tech developments pose.

Adult Learning Promotes Diversity

The pandemic, social unrest and sharp political divides have prompted companies to confront their diversity demons. Diversity, equity and inclusion have reshaped everything from board and C-suite agendas to the exit interview. No one said altering hundreds of years of collective corporate histories would be easy.

Most companies continue to struggle with reaching the DE&I goals they have set. In fact, many have made little headway at all. And if they manage to get diversity right, they can’t seem to follow through with the equity and inclusion bits.

Creating a diverse workforce requires a sea change in multiple business practices, from the writing of job descriptions to eliminating recruiter bias. Adult learning shouldn’t be overlooked as a potential path to achieving even the most ambitious diversity goals. And it can do so on two key fronts.

First, adult education on diversity issues for leadership and HR can alter entrenched perspectives from the top down. Second, companies can offer educational opportunities to current team members. Employees of certain races, social backgrounds, genders and sexual orientations may have lacked some of the educational opportunities of their white, male, cisgendered colleagues. Adult learning can narrow that gap. And once these diverse employees are on the job, continuing education can keep more of them advancing within the company.

Using adult education as a tool for creating a truly diverse, equitable and inclusive workforce is shrewd. It makes companies less reliant on market forces and more self-reliant. They’re creating their own success from within, rather than paying lip service to DE&I goals.

Making the Shift

Education can be the key to success in business. Employees know that, and they’re often enthusiastic about furthering theirs to advance their careers. Companies need to embrace and support those employees.

So many forces are changing how business is done these days. Adult learning is an easy and profitable one that will take employees and employers to the head of the class.

John Hall is a top motivational speaker and the co-founder of Calendar, a scheduling and time management app.

Source: How The Shift To Adult Learning Is Changing Business

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5 Straightforward Ways To Go From Employed To Self-Employed

5 straightforward ways to go from employed to self-employed..getty

If you’re considering taking the leap from employment to self-employment, you’ll feel a mix of excitement and uncertainly. Starting a new business from scratch is a scary prospect for many, holding various unknowns. A better way is to make a plan based on your current situation. Start where you are and use what you have, for a smoother, less daunting way of making the transition.

Here are five straightforward ways of going from employed to self-employed.

Do your existing role as a freelancer

One option is to do the role you currently do, for the same company, but on a freelance rather than employed basis. Perhaps you base the contract on a specific number of days per month or, even better, a specific set of outcomes.

What matters to your existing employer is not the number of hours you do, it’s the output or results you produce and the quality of your work. If you know your job takes you less than 40 hours per week, see if you can turn your employment into a contract instead. Not only will this free up your time to find other clients, it means you can make better use of your time and achieve more with less.

Cutting out the mundane aspects of employment can be efficient and more enjoyable. Saying no to team-wide meetings, performance reviews and appraisals and needing to clock in and out at a certain time might be the flexibility you’re looking for. This baby step could lead to giant leaps and new opportunities opening elsewhere. If you approach the conversation in the right way, your employer will understand the benefits of not having you as a member of staff.

Join freelance marketplaces

Assuming you want to stick within your current field, you could join freelance marketplaces where you build a client base from inbound leads. People Per Hour, Fiverr, Upwork, 99Designs and many others allow you to list yourself and your skills and secure project-based or ongoing work.

Particularly effective for roles including designers and writers, this approach involves you backing yourself to win clients and putting the work in to create an impressive profile, complete with work examples and references. Once that’s done, it could be an abundant resource of future clients. Securing the first few will lead to reviews on the platform, attracting more people to make enquiries.

Whatever your skills, whatever your industry, there are companies and individuals looking for them. Put yourself out there to make sure they find you. Set up your profiles without handing in your notice, then make the transition to self-employment as your workload dictates.

Work as an associate of other self-employed people

Want to do the work but not the business development? Rather than focusing on finding clients for yourself, create relationships with people doing the same work who may have too much to handle. Busy service providers only have so many hours in each week, and they may be happy to pass you clients on a white label basis, or for a finder’s fee.

See collaborators, not competition. Someone doing exactly what you want to do could be your biggest source of income if you get in with them at the right time. Don’t be afraid to ask the question; you never know where it might lead.

Seasoned self-employed professionals are often looking for ways they can make more money and impact without simply working more. Be confident that your proposal is a win-win situation and be exceptional in every interaction with them. They will be looking at you through the eyes of their clients, so be sure to impress.

Become a contractor for other companies

As well as asking your current employer if you could contract for them, make a shortlist of similar companies you could also approach. Graphic designers, for example, could receive regular work from multiple agencies. Same with telesales professionals, business development, HR and legal experts.

Having a range of companies who know your style and pass you work will mean your weeks are varied and flexible. It gives you freedom over your time and freedom over which gigs you accept.

Start with small projects and build up. Enquire about overflow and see if you can lend a hand, then prove yourself and win bigger commissions. Trusted suppliers are worth their weight in gold, and being the favourite contractor of all your clients will mean the work keeps flowing.

Know your ideal client mix before you begin. One day a week for five separate clients or less regular work with more? Perhaps something in the middle? Collect recommendation and keep meeting new companies until you have the ideal amount of work for your revenue and lifestyle goals.

Create a membership or retainer offering

Could what you do take the form of a membership? Imagine a legal advisor starting a $99 club, where businesses can have ad hoc advice in return for a small monthly retainer. As well as taking their calls, you send out helpful summaries and pre-empt problems that may occur. How many clients could you serve and how much value could you have?

This business model could work well for multiple areas of work. Human resources, accountancy, graphic design, research and intelligence. Mind map your membership club and what members receive, then run it by some prospects and see what they think.

Set your revenue goals and work backwards from there, to ascertain the members required and the monthly fee. Aim to add 10x value so the cost to subscribers is a no brainer. Think about what you could throw in. Think about the benefits your clients will access, being part of your club. Ask your current employer and ask your existing clients. Having access to your wisdom on a regular basis might be exactly what they need.

Five ways to go from employment to self-employment without starting from scratch, so you can take the first step right now. If you’re still not sure, think about the worst-case scenario, and what you’d do should it come true. It’s very likely that, as long as you don’t burn any bridges, you could still go back, in which case there’s no reason not to try. Could one of these options be the one you’ve been looking for?

Entrepreneur psychology and how to run a business without it running you. Post-exit entrepreneur, author of Ten Year Career and Forbes’ 30 under 30

Source: 5 Straightforward Ways To Go From Employed To Self-Employed

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5 Myths About Classroom Management in PBL

I want to make something clear before we dive into this topic. I made huge mistakes in classroom management as a teacher. I let certain disruptive behaviors go unchecked because I was tired and I didn’t want to put out another fire. I had moments when I shamed a student or yelled at a class.

I won’t even use the term “raise my voice” which sounds nicer. I yelled. Each time, I apologized and continued to grow. But the reality remains: I had tons of moments when I failed in this area. So, I feel a certain reticence when tackling the question, “How do I handle classroom management in a PBL unit?”

And yet, I also realize that my mistakes, as cringe-worthy as they may be, were also learning experiences. Teaching is an iterative process filled with experiments. I believe we can learn as much from the failures and mistakes as we can from the successes. So, with that in mind, I’d like to share what I learned about PBL and classroom management from my twelve years teaching middle school and my last three years working with new teachers who want to try out PBL but are nervous about the classroom management implications.

Why Classroom Management Matters

When I was new to project-based learning, people told me to “embrace the chaos.” I tried my hardest to embrace this mindset. Our class would be a vibrant space filled with noise and chaos and movement. I told students that during our project time, they could go wherever they wanted to go and talk whenever they wanted to talk.

This lasted three days.

I had students wandering around the classroom for the entire class period, socializing with friends and never actually working on their projects. The room became ear-splittingly loud. Meanwhile, I became edgy. The chaos felt off-task at best and unsafe at worst. At one point, another teacher walked into my classroom and said, “Why did you kick Alejandro out of class? He’s normally so quiet.” But the thing is, I hadn’t kicked Alejandro out. He had walked away because he felt anxious in the chaotic space.

Alejandro wasn’t alone. I printed up a quick survey (these were the pre- Google Forms days) to see how students felt about the classroom environment. Two-thirds described having a hard time concentrating on their work.

The next morning, I had coffee with my mentor and lamented, “I thought the project was authentic. I thought I could create a student-centered environment. I thought they would just know how to behave during a project like this. But, I don’t know, maybe I’m not able to create that kind of environment.”

He furrowed his eyebrows and said, “You ever work on a project when you’re at Starbucks?”

I nodded.

“Okay, watch the people in Starbucks. What trends do you see?”

I described people sitting at the tables and occasionally standing at a tall table. They moved to get coffee, to use the restroom, and to order items. However, they weren’t running around. Instead, it was relaxed.

Although the environment was noisy, it was mostly due to the work of grinding coffee and blending beverages. Most people were talking at a reasonable volume. They followed unspoken norms that allowed for communication and work. He then challenged me to think of all the spaces where I had done my best individual and collaborative projects. These were spaces designed for communication, deep thinking, and deep work. Some of these spaces were silent and others were loud. However, they were all spaces where I could focus.

I realized something critical at that moment. If we want students to engage in authentic projects, we need to design systems and structures that facilitate collaboration and creativity. For all the talk of “embracing chaos,” it turns out classroom management is a vital part of authentic PBL.

Myths About Classroom Management and PBL

The following are some of the common myths about classroom management and PBL.

Myth #1: Structure ruins creativity

This was the myth I bought into when I first embraced the PBL process. Like I mentioned before, I created a classroom environment free of constraint. Go where you need to go. Be as loud as you need to be. Take the John Mayer route and run through the halls of your high school and scream at the top of your lungs (yes, I just paraphrased John Mayer).

This came from a genuine recognition that school structures are often arbitrary and overly restrictive. However, I had gone to the opposite extreme of classroom management anarchy. I mistakenly believed in a false dichotomy between student ownership and classroom expectations.

Reality: Well-designed structures facilitate creativity

Architects often design spaces with two competing goals: craft spaces to reflect the way people will use them (starting with empathy) and create spaces that will create desired behaviors. Take Panera, for example. The physical layout reflects the need for both open and closed spaces with plenty of “breathing room.” They designed it to reflect the way people actually like to collaborate (the empathy-driven approach). However, they also have visual cues and physical structures that lead you toward specific locations the moment you walk in the door.

The same should be true of the structures in a PBL classroom. As educators, we can work like architects designing the structures that will facilitate creativity. We can start with the empathy-driven approach by asking “What would this be like to experience this as a student?”  It can help to imagine you are a student and spend some time thinking through what you might think and feel during an entire PBL Unit. You might even create student surveys to gauge what students need in order to thrive in a PBL environment.

From there, we can design systems that fit the needs of our students. For example, students need to move and they need to have the chance to stand up. However, they also need the opportunity to focus without distraction. So, we can create standing centers at the edges of the classroom. We can create physical pathways that allow for movement of materials.

However, we can also embrace the ideas of UX Design to guide students through the process. Students should be able to know where to find materials and where to go to get help. This goes beyond the physical structures. Students need to have pedagogical structures for things like brainstorming, ideating, research, and collaborative decision-making.

Myth #2: You need tons of transitions or students will be off-task

This was one of my biggest fears when starting out on my PBL journey. I had always transitioned every 15-20 minutes to prevent students from getting bored and checking out. I kept my lessons fast-paced with tight deadlines. So, when I switched to a project-based approach, I initially broke tasks down for students and kept the same tight time deadlines.

I didn’t realize it at the time, but I was creating a stop-and-go approach to projects. Although I wanted students to work quickly, they never truly hit a place of deep concentration because we were frantically moving from task to task, only to stop, wait for directions, and move on.

Reality: Students need to engage in deep work to hit a state of flow

Students actually accomplished more when we took out the transitions and focused on longer stretches of time to engage in the project work. This is a key idea behind what Cal Newport describes as “deep work” (I highly recommend the book), where people spend 1-3 hours without distractions. Here, they often hit a state of creative flow, where they attain hyper-concentration and fixate on their work. When this happens, they learn at a deeper level and they retain more of their knowledge.

But these moments of flow, whether they are in groups or individually, can also work as preventative classroom management. When students focus on their projects, they are less likely to disrupt the learning.

Myth #3: An engaging project means you won’t have discipline issues

When I look back at my worst moments as a teacher (those times when I shamed a student or yelled at a class), it was almost never during a project. A well-constructed project is one of the best preventative classroom management strategies. However, it’s a myth to think that you can focus on the pedagogy and ignore classroom management. Even in your best PBL units, you will have discipline issues you need to deal address.

Reality: You need clear expectations

When you first launch a PBL unit, you will likely have students who have never experienced project-based learning. They will need to know how it works and what they are expected to do. Because it’s so different (more collaborative work, more creativity, and often more hands-on learning) you will need to clarify the expectations.

You might need to generate a list of rules or norms together with your students. You will likely need to model and practice procedures with your students. The goal is to make it clear, visual, and memorable for students. Although this can feel less exciting than the actual project, it’s actually a vital part of the process.

Myth #4: PBL classrooms are noisy all the time

I get it. Some tasks are inherently noisy. It’s hard to have students doing physical prototyping in silence. The class is going to get noisy during the collaborative part of ideation. However, a project-based classroom doesn’t have to reach a deafening volume all the time.

Reality: The noise should never get in the way of the learning

It’s easy for one group to get louder and then other groups start talking louder until it slowly creeps to a level that prevents groups from working effectively. This is why it’s okay to have expectations of a general volume level during collaborative work. I’ve seen teachers use volume level charts (like a noise meter). When I taught middle school, I would do a thirty-second silent time-out when the noise got too loud. It worked like a reset button.

It also helps to create moments of strategic silence throughout a project. You might start the class period with a silent warm-up and end with a silent reflection. Or you might break up the project process to have students engage in silent thinking or quick writes to boost metacognition. You can also embed quiet individual tasks into the project process.

For example, students can engage in individual research to gain extra background knowledge. During the ideation process, students can brainstorm in isolation before meeting with their groups. They can also create their own SWOT assessments on their own before meeting with their groups to test and revise prototypes.

Myth #5: You need a system of punishments and rewards to keep group members accountable

We’ve all been there before. You do a group project and suddenly one member disappears. Another member has tons of opinions and ideas but doesn’t want to do any of the work. So, you end up doing the entire project by yourself. For this reason, it’s tempting to create rigid rules and consequences for group members in PBL units.

Reality: The best accountability is interdependence

There is a time and a place for external accountability. PBL expert Trevor Muir has students sign group accountability contracts at the start of each PBL unit. However, I’ve found that students are more accountable to one another when they have to work interdependently on their projects. Take, for example, this brainstorming strategy. Students actually benefit from listening to one another depending on each other for new ideas.

I often think of the LAUNCH Cycle as a roadmap for interdependent student ownership in creative projects. Here’s what this looks like:

  • Students tap into their own awareness and background knowledge during the Look, Listen, and Learn phase. Here, each member has the opportunity to share what they already know.
  • Students own the inquiry process as they ask specific questions in the Ask Tons of Questions phase. Each member can contribute their own questions to the entire group’s set of questions. Each member can add questions, regardless of their skill level or prior knowledge.
  • Students work interdependently to find specific facts in the research phase.
  • Students are generating their own ideas individually before engaging in the Navitage Ideas (group ideation) phase.
  • Each member of the group has a different role in the project management process and they all discuss progress collectively as a group
  • Every student has the opportunity to engage in assessment in the Highlight and Fix phase. I love the interdependence of the 20-minute peer feedback system here.
  • Being Proactive About Classroom Management
  1. Think about the procedures you will need to teach ahead of time.  What procedures and expectations will you need to teach ahead of time? How will students get materials? How will you handle noise? How will you handle movement? Are groups allowed to talk to one another? If so, what does that process look like? How will you handle students finishing at different rates? What kinds of “brain breaks” will you offer to students who need to walk away from their projects? How will you help students define these expectations together as a classroom community?
  2. Think about the space. How will you differentiate the space for different tasks? How will you design spaces for different types of learning? What will you do to encourage a free flow of movement? What visual cues will you create to help students navigate the space? What materials will you use? Where will you store these materials? Where will students put their physical products when they leave the class period (or move on to a new subject)? It helps hear to do an empathy exercise where you picture yourself as a student and ask what a student might be feeling or thinking.
  3. Think about the roles within the classroom. What types of group roles will you have?  How will your role change as a teacher? How will you spend your time when students are in the prototyping phase?
  4. Consider how you might communicate this shift to stakeholders. Are you comfortable having administrators and other leaders walking into your classroom during the prototyping phase? What kinds of fears might certain teachers face if they saw something that looked chaotic? What do you need to do to communicate the PBL process to parents/guardians, fellow staff members, and administrators?

Classroom management can actually be easier in a PBL classroom. With increased engagement and clear expectations, you often find yourself doing student-teacher conferences rather than redirecting behaviors. However, this requires an intentional, proactive classroom management plan. When this happens, all students are able to work collaboratively and creatively on the epic projects you have designed for them.

By: John Spencer

My goal is simple. I want to make something each day. Sometimes I make things. Sometimes I make a difference. On a good day, I get to do both.More about me

Source: 5 Myths About Classroom Management in PBL – John Spencer

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European Central Bank Raises Interest Rates For The First Time In 11 Years As Global Inflation Surges

The European Central Bank on Thursday authorized its first interest rate hike in 11 years in a bid to help cool rising inflation, becoming the latest central bank to more aggressively unwind policy that fueled economic growth during the pandemic even as global recession fears continue to rise.

In a statement on Thursday, the ECB said it would raise rates by 50 basis points as a “key step to make sure inflation returns to its 2% target over the medium term”—coming in at the higher end of expectations calling for an increase of at least 25 basis points.

Officials also signaled additional hikes to come, saying “further normalization” of interest rates will be appropriate, though they suggested the larger hike on Thursday will allow them to move more slowly with future increases, adding: “The frontloading today . . . allows the Governing Council to make a transition to a meeting-by-meeting approach to interest rate decisions.”

The decision comes after data showing inflation in the United Kingdom skyrocketed 9.4% in June, hitting a new 40-year high and surpassing similarly high inflation of 9.1% in the United States.

In a speech late last month, ECB President Christine Lagarde warned there are “growing signs”—including the ongoing war in Ukraine—that suggest “supply shocks hitting the economy could linger for longer” and further warned unforeseen shocks could de-anchor inflation expectations.

Lagarde doubled down on the message Thursday, telling reporters at a press conference that inflation could remain “undesirably high for some time” while also tempering concerns by saying she still doesn’t believe a recession in Europe is the most likely scenario over the next year.

Though it was initially flat for the day, the United Kingdom benchmark FTSE 100 fell 0.9% to 7,200 points after the announcement. Global stocks didn’t fare much better: S&P 500 futures erased premarket gains to trade roughly flat by 9:15 EDT.

Rising food and energy prices—fueled in part by Russia’s invasion of Ukraine—have elevated inflation around the world, pushing many central banks to raise interest rates, which help lower prices by making borrowing more expensive and thereby curbing demand. Increasingly, however, experts worry aggressive central bank policy to curb ongoing price spikes will usher in low economic growth this year and potentially risk a global recession.

“Excessive rate hikes could push the consumer-led economy into not only a short-term, but also a longer-term recession,” says Nigel Green, the CEO of $12 billion advisory deVere Group, warning of the risk that central banks “hit the brakes too hard” in the coming months.

Follow me on Twitter or LinkedIn. Send me a secure tip.

I’m a senior reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business

Source: European Central Bank Raises Interest Rates For The First Time In 11 Years As Global Inflation Surges

Critics:

The Ukraine war and Covid supply chain issues have driven up everyday costs across the world, putting pressure on households. The eurozone is vulnerable because it relies heavily on Russia for its oil and gas. This week it urged member states to begin rationing supplies amid fears Moscow will halt gas deliveries this year, causing further price spikes.

Explaining its decision to raise rates, ECB president Christine Lagarde said: “Economic activity [in the eurozone] is slowing. Russia’s unjustified aggression towards Ukraine is an ongoing drag on growth. “We expect inflation to remain undesirably high for some time owing to continued pressure from energy and food prices and pipeline pressures in the pricing chain,” she added.

The bank says further rate hikes “will be appropriate” and that it will take a “meeting-by-meeting” approach to raising rates. The idea is that by making it more expensive to borrow money, people will spend less, bringing down demand and therefore prices. However, there are also concerns that higher rates could push the bloc into recession – which is defined as two successive quarters of economic decline.

These fears helped push the euro to a 20-year low against the dollar in recent weeks. The ECB began cutting interest rates after the 2008 financial crisis to stimulate growth, and took them as low as -0.5% during the pandemic. The idea was to encourage banks to lend rather than deposit money with the ECB.

Earlier this year the bank signalled it planned to increase rates again, although economists had only expected an increase of 0.25 percentage points in July. Some economists have criticised the ECB for moving too slowly, pointing out that the UK and US began raising rates months ago. Carsten Brzeski, chief eurozone economist at ING bank, said: “In hindsight, the very gradual and cautious normalisation process the ECB started at the end of last year has simply been too slow and too late.”

However, there are concerns about how higher borrowing costs will affect highly indebted European nations, including Italy and Greece.

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