2023-06-22 22:35:00
The global economy is already reeling from more than a year of rate hikes, but central banks are becoming increasingly concerned that inflation has not yet subsided, forcing a new phase of monetary tightening.
With summer in full swing in the northern hemisphere this week, Britain reported surprisingly persistent price gains and Fed Chairman Jerome Powell said on Monday that two more interest rate hikes may be needed. warned.
Within hours of the Fed’s forecast, the Bank of England and the Bank of Norway both accelerated tightening by raising interest rates by half a percentage point each, and said they would raise interest rates further. Inflation is close to 2% in Switzerland, but the country’s authorities have also indicated they are not prepared to end monetary tightening.
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UK, Switzerland, Norway and Turkey All Hiked on Thursday
Change in borrowing costs since start of 2023
Source: Bloomberg
June began with the prospect of a breather amid expectations of a pause in U.S. rate hikes, but is now set to end amid a new concerted price alert. The economic outlook is clouded with little prospect of a moderation in interest rate hikes in the coming months.
“Evidence A” of the need for monetary tightening is Turkey. With inflation soaring to nearly 40%, Erdogan finally had to accept the start of tightening on Friday. “Evidence B” might be the UK. The consumer price index (CPI) is still above 8% year-on-year and is struggling to contain inflation.
UK Has Higher Inflation Than Its Major Peers
Britain has US labor market problems, European energy problems
Source: Office for National Statistics, Eurostat, Bureau of Labor Statistics
news-rsf-original-reference paywall">Original title:Global Inflation Alarm Augurs a Long Hot Summer of Rate Hikes(excerpt)
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