Will high interest rates be cut soon?

2024-03-25

Download

The past few years have been marked by two economic trends that have affected pretty much everyone on the planet. The first is the cost of living crisis that followed the Covid pandemic and was made worse by Russia’s invasion of Ukraine. That saw prices in the shops soar - in many countries they rose by their fastest pace for four decades. The attempt to stamp out this inflation is the second of those big economic trends, as central banks aggressively increased the cost of borrowing. Millions of h...

The past few years have been marked by two economic trends that have affected pretty much everyone on the planet.

The first is the cost of living crisis that followed the Covid pandemic and was made worse by Russia’s invasion of Ukraine. That saw prices in the shops soar - in many countries they rose by their fastest pace for four decades.

The attempt to stamp out this inflation is the second of those big economic trends, as central banks aggressively increased the cost of borrowing. Millions of households and businesses saw the cost of home and company loans shoot up.

But the action taken by central banks does seem to have worked in curbing inflation, and now financial markets predict that interest rates in the United States and Europe will be cut this year. But will they reduce them soon?

(Picture: Federal Reserve Building in Washington, DC, United States. Credit: Getty Images)

Presented and produced by Rob Young

Comments (3)