Central banks in three countries lift rates amid inflation pressure
The Bank of England raised Bank Rate by 0.25 points to 4% on 4 Nov, voting 8-1, with one member favouring a 0.5-point rise. UK CPI inflation rose to 3.5% in September and is expected to reach about 5% by mid-next year, which the bank linked to the Middle East conflict and higher energy prices. In Sweden, Riksbanken lifted its policy rate by 0.25 points to 2.0%, its first increase since 2023, and said further rises are likely over the next year. Public-sector banks in India lifted one-year certificate of deposit rates above 8% as liquidity tightened.
Key facts
- Swedbank chief economist Mattias Persson said another Swedish increase may be needed early next year.
- Danske Bank chief economist Susanne Spector expects Riksbanken to raise rates in February and March 2027.
- Three 0.25-point increases would add 1,875 kronor monthly to interest on a three million kronor mortgage.
- Jana Small Finance Bank treasury head Gopal Tripathi said CD rates have not yet reached their peak.
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Why it matters
Higher policy rates raise borrowing costs for households and firms across the UK, Sweden and India.
What changed
First published from The Economic Times, SVT Nyheter and Bank of England