The central banks of Britain, Switzerland and Norway have raised their interest rates, following the example of the Federal Reserve (Fed) and the European Central Bank (ECB) in further tightening monetary policy to tame inflation.
The Bank of England (BoE) cut its key interest rate by 25 basis points to 4.25%, the highest point since 2008.
For its part, the Swiss National Bank (BNS) increased its official interest rate by 50 bp (the same size as the ECB a week ago) to 1.5 percent.
The Norwegian central bank followed suit, raising it more modestly by 25 bp to 3 percent.
On Wednesday, H raised its benchmark rate by a quarter of a cent to 4.75-5.0%, as the market expected.
After the most recent monetary policy meeting, the SNB declared that it would “resist a new increase in inflationary pressures”, while Norges Bank said that high rates are “necessary to control inflation”.
The BoE has warned that it will tighten its monetary policy if inflationary pressures continue in the UK.
In the three European countries, the main goal of monetary policy continues to be to control inflation at 2%, which is still far from it.
The failure of US banks Silicon Valley Bank, Signature Bank and Silvergate shows how far the banking sector has been weakened by the crazy hikes in recent months.
H suggests that he is nearing the end of his tenure cycle and is now using the current situation to suggest that “there is a need to tighten the financial plan for the future”.
After his meeting, he warned that the recent problems in the banking sector “are going to result in tighter credit conditions for families and companies and could weigh on economic activity, employment and inflation.”
The risk is not limited to the United States, as demonstrated by the purchase of Credit Suisse at a modest price by its rival UBS.
The President of the European Central Bank (ECB), Christine Lagarde warned on Wednesday that recent tensions in the banking sector create new risks for the economy.
The official defended that there is still “a way to go” to contain inflation which, according to the institution’s forecasts, will reach 2% until 2025. In February, inflation in the euro zone stood at 8.5% per year, tenth. less than January.
In Britain, inflation rose to 10.4% year-on-year in February, although the BoE and the government expect it to fall this year.