Central Banks Sound Alarm on Inflation with Rate Hikes Looming

The world's major central banks have taken a more hawkish tone in response to persistently high inflation pressures and resilient economic growth. The European Central Bank hiked rates by 25 basis points on Thursday, marking its second increase this year.

Major economies such as Australia and the United States are expected to follow suit next week, with markets pricing in a higher likelihood of rate hikes. In Australia, interest rates have been increased three times this year to 4.35%, undoing last year's cuts.

The Reserve Bank of Australia is likely to hike again, especially after a hot July inflation print. Similarly, the Federal Reserve's meeting next week is anticipated to bring monetary tightening, with markets expecting more than a 50% chance of a rate hike.