ECB rate hike shows central banks not giving up inflation fight even with banking turmoil

The European Central Bank’s rate hike this week may have sealed the fate of next week’s rate decision by the US Federal Reserve. PHOTO: EPA-EFE
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SINGAPORE - A banking crisis ripping through financial markets worldwide did not stop the European Central Bank (ECB) on Thursday from again raising interest rates, a signal that central banks are not prepared to give up their fight against inflation.

The ECB’s decision to hike rates by as much as it had promised before the onset of the current banking turmoil may have sealed the fate of next week’s rate decision by the US Federal Reserve.

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