Surging inflation puts interest rates back in focus as policymakers meet in Japan, US and UK
Iran war and turbulent global bond markets add to pressure as rate decisions loom this week in major western economies Economics viewpoint: perilous UK economic conditions trace back to Trump Central bankers in economies including the US, Japan and the UK will face a moment of truth this week, as surging inflation raises the prospect of higher interest rates. Policymakers in all three countries…
Inflation is on the rise, prompting central banks in the US, Japan, and the UK to consider raising interest rates. The US Federal Reserve, under the chairmanship of Kevin Warsh, will be under pressure to raise rates, despite calls from President Trump for lower rates. The US is grappling with surging oil prices, hitting $100 per barrel for the first time in months, due to the Iran conflict and Houthi rebels in the Red Sea.
This is causing US inflation to remain above the Fed's 2% target for over five years. In Japan, the Bank of Japan is expected to raise interest rates, the first in more than three decades, as the country battles deflation. European Central Bank President Christine Lagarde also highlighted ongoing inflation pressures stemming from the Middle East conflict, suggesting inflation will remain high for an extended period.
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