The European Central Bank raised interest rates on Thursday, becoming the first of the world’s major developed economies to do so since the outset of the Iran war. Frankfurt cited “a broadening of inflation throughout the economy.”
A spike in US inflation is also putting pressure on the Federal Reserve — and its new chair — to hike the cost of borrowing this year. Policymakers worldwide are in a bind: The World Bank projected Thursday that the Iran war will drag the global economy to its slowest growth since the start of the pandemic.
The group forecast GDP growth to fall to 2.5% this year and has cut its forecasts for two-thirds of countries since January.