Countries all around the world are changing course after forcing borrowing costs considerably up in recent years in an attempt to stem skyrocketing prices.
The primary lending rate of the European Central Bank (ECB) was lowered from an all-time high of 4% to 3.75% on Thursday, marking the bank’s first interest rate reduction in five years.
Canada had done the same the day before, and Sweden, Switzerland, Brazil, and Mexico had all taken similar steps in recent months.
At their meetings this month, officials in the US and the UK are anticipated to hold off on making any cuts, as borrowing prices are currently at their highest level in years.
However, a lot of observers believe it’s only a question of time and are waiting for action until later in the summer or early fall.
It’s an indication that the worldwide war on inflation, which the epidemic ignited, is about to enter a new phase as optimism that price inflation is finally beginning to stabilize grows in some of the largest and most seriously hit economies.
According to Brian Coulton, chief economist at Fitch Ratings, “it’s an important move.” “We’re entering a new phase.”
Several years ago, central banks globally raised interest rates sharply in the hopes that increased borrowing costs would burden the economy and lessen the forces driving up prices.
The actions were remarkably coordinated in response to disruptions in the global food supply system and
