Central banks around the world moved to increase interest rates or support their currencies on Thursday, following the U.S. Federal Reserve in a global fight against inflation that is sending shockwaves to markets and the economy.
The Bank of England was the latest after raising its key interest rate for the seventh consecutive time Thursday, increasing it to 2.25% from 1.75%. The BoE said it would continue to “respond forcefully, as necessary” to inflation, despite the economy entering recession.
Japan kept interest rates steady and was quickly punished as traders pushed the yen to a record low against the dollar, prompting the first intervention by Japanese authorities to support the currency since 1998.
Switzerland raised its policy interest rate by 0.75 of a percentage point, ending the country’s seven-year experiment with negative rates.
The Fed set the pace on Wednesday with a 0.75% rate hike, its fifth increase since March and the third consecutive 0.75 percentage point increase.
Stocks slipped in early trading. The Dow Jones Industrial Average was last down 91 points, or 0.3%. The S&P 500 traded 0.74% lower and the Nasdaq Composite slid 1.4%.
Turkey’s central bank delivered another surprise 100 basis-point rate cut on Thursday, sending the lira tumbling to an all-time low, even as inflation rose above 80%.