Europe's Two Big Central Banks Raise Rates

Citing inflationary trends, Bank of England and ECB separately hike interest ratesand both seem ready, if not eager, to do it again

Are Europe's central bankers seeing a greater threat from inflation than the markets previously thought? Apparently so. In a surprise move, Bank of England officials hiked the benchmark British interest rate by 25 basis points on Aug. 3, while the BoE's Continental counterpart, the European Central Bank, tightened by a similar amount, as had been widely expected. The moves bring the BoE's key policy rate to 4.75%, while the ECB's refi rate rises to 3.0%.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.