The Bank of England will join the Norwegian and Swiss central banks in revealing their latest moves on borrowing costs also in the face of stubbornly-high inflation. AFP/Justin Tallis
LONDON - A clutch of European central banks announce interest-rate decisions on Thursday as markets remain jittery over turmoil in the global banking sector.
The Bank of England will join the Norwegian and Swiss central banks in revealing their latest moves on borrowing costs also in the face of stubbornly-high inflation.
All three are expected to lift rates, following the US Federal Reserve's decision Wednesday to hike interest rates by a quarter of a percentage point, or 25 basis points.
While the Fed said that "some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive" to bring down inflation, it added that the recent turmoil in the banking sector may help achieve that.
Recent banking sector developments "are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation," the Fed said in a statement.
At the start of the week, there was much talk about how the Bank of England could decide against lifting its key rate, which stands at 4.0 percent.
However, official data Wednesday showing a surprise jump in annual UK inflation to 10.4 percent quickly changed that conversation.
Ahead of the release, "the Bank of England's interest rate decision was a coin flip between a 25-basis points hike or no change in monetary policy", noted Fawad Razaqzada, market analyst at City Index.
But following the inflation number, the BoE is "now highly likely to raise rates by 25 basis points", he added.
An increase would be the central bank's eleventh in a row since the end of 2021 when its rate stood at a record-low 0.1 percent.
In between the decisions by the SNB and BoE, the Norwegian central bank is predicted to raise its interest rate by a quarter-point to 3.0 percent.
After five straight rises, Norges Bank left borrowing costs at 2.75 percent in January.