Why have Central banks around the world started hiking rates? | Explained

Central banks around the world have started hiking interest rates after a period of monetary easing. This means they are increasing the cost of borrowing money, making it more expensive for people and businesses to take out loans. The main reason for this shift is the return of inflationary pressures, which can erode the purchasing power of consumers and reduce the value of savings. As a result, central banks are tightening their monetary policies to control inflation and maintain economic stability.

Why it matters

Central banks are hiking rates due to renewed inflationary pressures. This move may have less room to cut interest rates further, potentially forcing some banks to tighten monetary policy.

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