The major central banks in the world concluded their last meeting of the year, and in line with market expectations, stabilizing interest rates was the title of the end of 2023.
After the US Federal Reserve’s decision to keep rates unchanged, the Bank of England and the European Central Bank took a similar step by stabilizing prices, while the current rates in most countries are considered record and have not been seen for nearly 20 years, reports Al-Rai daily.
In 2023, the US Federal Reserve carried out a total of 100 basis points of interest hikes during the year, bringing interest rates to levels of 5.25-5.5 percent, the highest in 22 years.
These record levels pushed inflation rates in America to decline sharply from 6.4 percent at the beginning of the year to 3.1 percent until November. Despite the Federal Reserve’s ability to reduce inflation, the budget deficit recorded strong jumps while debt levels continue to rise with record interest rates, while regional banks collapsed during the year.
On the other hand, the European Central Bank is facing great economic pressure, especially in light of the impact of the Russian-Ukrainian war on energy prices, as during 2023 it raised interest rates by 200 basis points, bringing the lending interest to levels of 4 percent, which is the highest ever, which contributed to a decline in inflation to levels of 2.4 percent in November from 8.6 percent at the beginning of the year, as these declines in prices made the European Central Bank change its tone regarding inflation, indicating that it “will gradually decline over the next year” compared to its previous always indicating that “inflation will remain high for a very long time.”
Turning to Britain, the Bank of England, for its part, raised interest rates by 175 basis points during the year, bringing interest rates to levels of 5.25 percent, the highest in 15 years, reducing inflation to 4.6 percent in October from 10.1 percent at the beginning of the year.
Despite these declines, inflation rates remain a major dilemma for the government in Britain, especially as they are the highest in the Group of Seven, not to mention the consequences of the Bank of England’s intervention during 2023 in the bond market after a major crisis during the fall budget.
