Interest rate rises in doubt as fear of new global crisis rattles central banks

Governor of the Bank of England, Andrew Bailey, has said inflation is likely to fall ‘quite rapidly’ starting in the late spring as he indicated ‘a corner has been turned’ during a speech in South Wales. Photograph: Leon Neal/PA

In 2006 the US central bank completed a series of interest rate rises that took its base rate from 1% to 5.25%. The plan was to cool a booming economy, but ended two years later with the great financial crash.

Earlier this month, the Federal Reserve was expected to push ahead with a 0.25 percentage point rise from its current range of 4.5% to 4.75%, this time to quell inflation generated by the Covid-19 pandemic and Ukraine war.