ECB Signals More Rate Hikes After Raising to 22-Year High

The European Central Bank (ECB) has raised interest rates for the eighth consecutive time to a 22-year high of 3.5%, and signalled further policy tightening to combat high inflation. The ECB has increased borrowing costs by a combined 4 percentage points in a year, but a peak is now in sight. The labour market remains tight, nominal wage growth is quick and underlying price pressures, particularly for services, appear to be stubbornly high. The U.S. Federal Reserve paused its rate hikes on Wednesday after 10 straight increases, signalling that a global tightening cycle could soon come to an end.