Why can an increase in inflation rate, increase interest rates? A Random Walk Down Wall Street (2015 11 ed). pp. 224 Bottom - 225 Top.


    Changes in the rate of inflation will similarly tend to have a systematic influence on the returns from common stocks. This is so for at least two reasons. First, an increase in the rate of inflation tends to increase interest rates and thus tends to lower the prices of some equities, as just discussed. Second, the increase in inflation may squeeze profit margins for certain groups of companies—public utilities, for example, which often find that rate increases lag behind increases in costs. On the other hand, inflation may benefit the prices of common stocks in the natural resource industries. Thus, again there are important systematic relationships between stock returns and economic variables that may not be captured adequately by a simple beta measure of risk.


Please expound the sentence bolded overhead?
In a free currency exchanges market, the central bank defined goal, in the general case, is to maintain price stability and inflation rate restrained, that is to keep inflation positive but at a low rate, 
In order to encourage economic activity

Inflation can be manipulated by the amount of money - more money in the system, the lower its value, and higher prices respectively, and vice-versa.

The amount of money is manipulated by the central using interest rates: higher interest rates encourages deposits in banks and discourages taking loans, both actions leading to less money in the system, and vice-versa