Parade of rate hikes to end the year of fighting inflation

The world's biggest central banks will end their most aggressive year of interest rate hikes this week. However, their fight against inflation is not over yet.

It is expected that the Fed will begin to reduce the pace of tightening by raising its key rate by 0.5%. At the same time, the rate will continue to rise in early 2023.

The European Central Bank (ECB) is likely to increase rates by 0.5% since inflation slowed down in November. Back then, inflation decelerated for the first time in a year and a half. Nevertheless, a third consecutive 0.75% rate hike cannot be completely ruled out. Some policymakers believe they may opt for such a hike.

It is assumed that the Bank of England will increase the rate by 0.5% to 3.5%. Policymakers have said they will act forcefully to prevent price increases.

Swiss National Bank is also dealing with soaring inflation. But a 3% inflation rate is less than a third of that in the surrounding euro area. Thus, policymakers will probably raise rates by 0.5% instead of 0.75%.

The Central Bank of Norway (Norges) set to raise the key rate by 0.25%. Such a move by Norges is explained by the slowdown in both headline and underlying price growth in the country over the past month.