After a series of fourteen interest rate increases as part of the fight against high inflation, the Bank of England decided to leave interest rates unchanged. The US Federal Reserve also decided to do so on Wednesday.
The British Central Bank kept interest rates at 5.25 percent, the highest level in fifteen years. It was decided not to implement the increase after all because inflation suddenly fell sharply in August.
Interest rate increases affect commercial and consumer loan rates. By raising interest rates, a central bank can make borrowing less attractive, thus limiting business and consumer spending. This way you can combat high inflation. But it takes some time before it takes effect.
The United States also decided to suspend interest rates on Wednesday evening after a long series of interest rate increases. The same thing happened in Switzerland on Thursday.
Earlier in September, the European Central Bank raised its key interest rate for the tenth time in more than a year. According to experts, this may be the last increase in interest rates for a while.
Although ideal inflation levels of 2% are not yet within reach in the UK, US and EU, central banks do not want to raise interest rates very often. As higher interest rates slow spending and investments, this may also come at the expense of economic growth.
In Norway, Sweden and Turkey, interest rates rose further on Thursday. In Turkey, interest rates rose from 25 to 30 percent to slow inflation. In August, the inflation rate in this country reached 60%.
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14 sep 2023 om 14:16
ECB schroeft rente voor tiende keer op naar hoogste niveau ooit
