Fed Hike Sparks Global Rate Review as Inflation Fears Mount

The US Federal Reserve has raised interest rates for the first time in three years by 25 basis points, leaving the official rate between 3.75% and 4%. This move is a response to high inflation, which remains above target levels.

The Bank of England will decide on its rates later today, with many expecting it to keep them unchanged for the sixth consecutive meeting. However, there are concerns about high inflation and rising energy costs.

In Japan, the central bank is set to meet next week and may raise interest rates to 1.25%, a level not seen in three decades. This would help support the yen, which has been weakening due to its trade deficit.