Uncertainty Looms Over Central Banks' Rate Hike Plans

Sticky core inflation, tight labor markets, and a resilient global economy are leading some economists to reassess the expected pause in interest rate hikes from major central banks toward the end of 2023. Stronger-than-expected US jobs figures and GDP data have highlighted a key risk to the Federal Reserve potentially taking its foot off the monetary brake. The European Central Bank faces a similar dilemma, having slowed the pace of its hiking increments from 50 basis points to 25 basis points at its May meeting. The UK faces a much tougher inflation challenge than the US and the euro zone, and the Bank of England is expected to hike interest rates further to curtail price rises.