Latest action! Multiple Central Banks Announce Interest Rate hikes by Basis Points | Bank of England | Multiple Central Banks
On June 22, the Bank of Switzerland, the Bank of England, the Bank of Türkiye and the Bank of Norway announced interest rate increases.
The Swiss Central Bank announces a 25 basis point interest rate hike
According to ABC, on the 22nd local time, the Swiss central bank announced a 25 basis point rate hike to 1.75%, in line with market expectations. This is the fifth consecutive rate hike by the Swiss central bank since entering a rate hike cycle last year. The Swiss central bank has stated that it hopes to curb inflation by raising interest rates and does not rule out the possibility of further rate hikes in the future.
13th consecutive interest rate hike! The Bank of England announces a 50 basis point interest rate hike
On the 22nd local time, the Bank of England, the central bank of the United Kingdom, announced a 50 basis point interest rate hike, raising the benchmark interest rate from 4.5% to 5%. This is the thirteenth consecutive rate hike by the Bank of England since December 2021.
Stubborn Inflation Market Expects Bank of England to Continue Raising Interest Rates in the Future
In the eyes of market participants, the Bank of England's interest rate hike this time is 25 basis points higher than the widely expected market, indicating that inflation pressure in the UK is still stubborn. Compared to the eurozone and the United States, the inflation level in the UK is higher. According to data released by the UK Office for National Statistics on the 21st, the UK Consumer Price Index rose 8.7% year-on-year in May, higher than market expectations, and the year-on-year increase remains at a historical high. The core inflation rate, excluding food and energy prices, rose from 6.8% in April to 7.1%, reaching a new high since March 1992. Analysts point out that given the rapid recovery of the UK service industry and the fact that the UK economy has largely escaped the risk of technical recession, the market generally expects that if inflation does not significantly fall, the Bank of England still has the possibility of raising interest rates in the future.
Türkiye's central bank announced an interest rate increase of 650 basis points
On June 22 local time, the Monetary Policy Committee of the Bank of Türkiye announced that the benchmark interest rate would be raised by 650 basis points, from 8.5% to 15%, which is the first time that Türkiye has raised the benchmark interest rate since March 2021. The industry believes that this is a strong signal that Türkiye is turning to orthodox economic policies to deal with high inflation.
At present, the inflation level in Türkiye exceeds 40%, and exceeded 85% last year, the highest level in 24 years. Traditionally, the common way to fight inflation is to raise interest rates, but President Erdogan of Türkiye has long opposed high interest rates, and even said that high interest rates are the reason for high inflation. From September 2021 to May this year, Türkiye's benchmark interest rate has been reduced from 19% to 8.5%. It is worth noting that almost every interest rate cut has led to a further decline in the lira. In the past three years, the Türkiye lira has depreciated 67% against the US dollar.
Many analysts predict that Türkiye may continue to raise interest rates in the coming months in order to fight against the high inflation.
The Norwegian central bank raised interest rates by 50 basis points to curb inflation
The Norwegian central bank announced on the 22nd that it will raise its benchmark interest rate by 0.5 percentage points to 3.75% to curb inflation.
Since the beginning of this year, prices of goods and services in Norway have risen rapidly. The Norwegian Consumer Price Index rose 6.7% year-on-year in May, far exceeding expectations in the Bank of Norway's March monetary policy report.
The Norwegian central bank stated that due to the significantly higher than expected CPI increase, and taking into account factors such as interest rate hikes in other European countries, rising wages for Norwegian workers, and accelerated depreciation of the Norwegian krone, inflation may become even more severe if interest rates are not raised.
The Norwegian central bank also stated that if this rate hike fails to effectively curb inflation, it may raise interest rates by another 50 basis points in August, raising the benchmark interest rate to 4.25%.
