Europe, US and UK central banks hike interest rates
Last week was a busy week for the major central banks, as the European Central Bank (ECB), the US Federal Reserve (Fed) and the Bank of England (BoE) all hiked their respective key interest rates. As widely anticipated, on Thursday the ECB raised interest rates by half a percentage point to three per cent, as concerns mount that inflation will remain high despite the recent fall in energy prices. Thursday’s hike was in line with what the bank had projected in December and with market expectations. One the same day, the BoE’s rate-setting Monetary Policy Committee also decided to raise its benchmark interest rate by half a percentage point to four per cent, its 10th consecutive increase. The move was also broadly expected. The bank signaled however, that inflation had probably peaked. The Fed also raised interest rates but by a lesser quarter percentage point on Wednesday, its eighth increase in less than a year, as the central bank continues to battle inflation. The Fed’s move was widely anticipated and marked the second time in a row that it slowed its increases, bringing its benchmark interest rate to a range of 4.5-4.75 per cent. Separately in the UK, approvals for home loans...