Following the US Fed’s biggest rate hike since 1994 on Wednesday, which drove oil prices down 1%, Europe’s central banks on Thursday raised interest rates by record amounts in a effort to curb inflation as energy prices rise.
The biggest shocks came from the Swiss National Bank and the National Bank of Hungary.
The Swiss National Bank made its first rise in interest rates since 2007, raising rates by 50 basis points from -0.75% to -0.25%, which made the franc Swiss increased.
“We came to the conclusion that it is now better to raise interest rates by 50 basis points and not by 25 points to take a first step, in order to really show that we are fighting inflation so that it does the same, in the middle. term, be in the range of price stability, “CNBC said.
In Hungary, the central bank raised the one-week deposit rate by 50 basis points, taking the market by surprise.
The Bank of England also raised interest rates for the fifth time on Thursday, raising them by 25 basis points to 1.25%, noting that the bank “will take the necessary steps to bring inflation back to normal ‘2% sustainable target in the medium term’, CNBC. reported.
On Wednesday, the European Central Bank paved the way for rate hikes in July and September.
“We are in a new era for central banks, where reducing inflation is their only goal, even at the expense of financial stability and growth,” said George Lagarias, chief economist at Mazars Wealth Management. Reuters reported.
Inflation across Europe has been caused by rising oil and gas prices, which rose another 24% on Thursday after Russia further halted gas flows to the European Union via the Nord Stream gas pipeline 1 , citing technical issues.
From Charles Kennedy for Oilprice.com
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