Central Banks Tread Carefully as Energy Prices Push Inflation

The European Central Bank has raised interest rates to 2.5%, citing concerns over inflation and the ongoing US-Iran war.

Surging oil prices have driven up fuel costs, putting pressure on household budgets, and economists predict that inflation will remain above its 2% target for some time.

The US Federal Reserve is expected to make a decision on interest rates next week, with many predicting a rate hike due to a strong jobs market and rising energy prices.

Newly-appointed Fed Chair Kevin Warsh has been tight-lipped about his views on interest rates, but his comments have fueled expectations of an increase.