If the Iran conflict keeps oil and gas prices elevated, central banks could face a nasty combination of slowing economic growth and renewed inflation.
Bank of England raises rates for the first time since 2023
The Bank of England raised its benchmark rate to 4%, citing renewed inflation pressure. Governor Andrew Bailey warned that further increases could follow if the energy shock persists.
Central banks largely pause after September’s rate-hiking wave
Reuters reported that six G10 central banks delivered 150 basis points of increases in September, the largest monthly tightening wave since June 2023. October was quieter: Canada was the only G10 central bank to raise rates, while the Fed, ECB, Bank of Japan and Reserve Bank of New Zealand held steady.
ECB warns another rate increase may be necessary
Christine Lagarde said the European Central Bank would assess incoming inflation and economic data before deciding whether another increase is needed in December. Higher energy costs are complicating its inflation outlook.
Bank of Canada raises its policy rate
Canada raised its benchmark rate to 2.50%, adding to evidence that inflation concerns are returning in some developed economies.
h/t walrus_operator
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