The fight against inflation intensified this week as central banks stepped up their efforts to cool rising prices, and a global recession could be the price we pay.
Investors reeled from the biggest rise in US interest rates in almost three decades, before Switzerland piled in with a shock increase in its borrowing costs, topped off by the fifth rise in a row from the Bank of England.
This flurry of rate hikes showed that central bankers are deeply worried by the threat of red-hot inflation, and prepared to plunge the world economy into a downturn to cool it.
This hawkishness sent global stock markets tumbling to their lowest point in 18 months, and on track for the biggest weekly drop since 2020 as markets entered “extreme bearish” territory.
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America’s benchmark S&P 500 index fell into a bear market, 20% off its peak, hammering home that markets are in a steep, sustained downturn that could signal a recession.
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