Economists expect that "BOE-ECB" must raise policy interest rates. Fight inflation

Economists expect that "BOE-ECB" must continue to raise policy interest rates. To prevent the risk of causing inflation. This is because inflation is still higher than the 2% target.

On September 18, 2566, Yahoo Finance reported that renowned economist Nouriel Roubini stated that the European Central Bank (ECB) and the Bank of England (BOE) would need to continue raising interest rates to prevent the risk of inflation.

Roubini said that the recent rise in oil prices will keep headline inflation high, and talk of more accommodative monetary policy may come prematurely. The ECB and BOE face a larger dilemma than the U.S. central bank, as inflation continues to rise rapidly and growth is slowing.

Roubini stated that the BOE should raise interest rates to 5.75%. Currently, the Bank of the UK's key interest rate is 5.25%, and it is expected to rise further this quarter.

The Bank of England (BOE) has changed its guidance over the past two to three weeks as the economy begins to slow, output falls in July and unemployment rises. UK policymakers are talking about keeping interest rates high for an extended period, rather than pushing for further increases, in order to keep them stable. This comes as current consumer price inflation stands at 6.8%, more than three times the 2% target.

Meanwhile, the United States is in a stronger position. Indicates that there was a soft landing. But he said the market was wrong to expect a rate cut early next year. But he said the Fed may need to raise interest rates further. And the first interest rate cut will happen probably in the middle of the year.

Structural changes in the world economy From aging populations to the geopolitics of supply chains. It will keep inflation at a high level. As a result, the central bank will have to increase its inflation target from 2% to 3% or 4%.

“Both on the supply side and the demand side. There are factors that indicate 2% at this point is mission impossible. And the new normal will probably be between 3% and 4% for developed economies over time. That certainly isn't overnight.”