In three European countries, the number one objective of monetary policy is to achieve an inflation rate of 2%. However, the collapse of California-based Silicon Valley Bank (SVB) and then two other US regional banks showed how weak the banking sector was due to rate hikes in recent months. This makes further tightening of monetary policy dangerous, according to AFP.
In the UK, the central bank can only leave the policy rate unchanged at 4% if inflation moves in line with expectations. However, inflation in February in the country exceeded 10%, which surprised the regulator.
The Swiss National Bank (SNB), which secured the purchase of Credit Suisse this weekend, should raise its rate by 50 basis points, just like the ECB before it, economists estimate. The reason for this is again inflation, which remains well below that of the rest of Europe. It is now around 3.4%, but in recent months there has been an acceleration. Swiss key rates remain low – at 1% – after several years of negative rates.
In Norway, the central bank left itself little leeway. Rates remained unchanged at 2.75%, but changes in March cannot be ruled out. Economists note that a policy rate of 3% is preferable for the country’s financial stability, despite the fact that inflation slowed to 6.3% in February.
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