{"id":56883,"date":"2022-09-16T05:34:54","date_gmt":"2022-09-16T05:34:54","guid":{"rendered":"https:\/\/tahrir2day.com\/news\/2022\/09\/16\/world-bank-global-rate-hikes-could-trigger-2023-recession\/"},"modified":"2022-09-16T05:34:54","modified_gmt":"2022-09-16T05:34:54","slug":"world-bank-global-rate-hikes-could-trigger-2023-recession","status":"publish","type":"post","link":"https:\/\/tahrir2day.com\/news\/2022\/09\/16\/world-bank-global-rate-hikes-could-trigger-2023-recession\/","title":{"rendered":"World Bank: Global rate hikes could trigger 2023 recession"},"content":{"rendered":"
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Rate hikes by central banks around the world could trigger a global recession in 2023, the World Bank has said.<\/b><\/p>\n<\/div>\n

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Central banks have hiked rates “with a synchronicity not seen in the past five decades” to counter rising prices, it said.<\/p>\n<\/div>\n

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Rising interest rates make borrowing more expensive in an attempt to curb the pace of price increases.<\/p>\n<\/div>\n

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But it also makes borrowing more expensive, which can slow economic growth.<\/p>\n<\/div>\n

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The World Bank’s warning comes ahead of the Federal Reserve’s and Bank of England’s monetary policy meetings, which are expected to raise interest rates next week.<\/p>\n<\/div>\n

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  • US mortgage rates hit 14-year high as inflation soars<\/li>\n
  • World Bank chief warns of risk of global recession<\/li>\n<\/ul>\n<\/div>\n<\/div>\n
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    On Thursday, the World Bank said the global economy was in its worst slowdown since 1970.<\/p>\n<\/div>\n

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    A study found that “the world’s three largest economies — the US, China and the eurozone — have slowed sharply.”<\/p>\n<\/div>\n

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    “Under the circumstances, even a moderate hit to the global economy next year could plunge it into recession,” it said.<\/p>\n<\/div>\n

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    The World Bank also called on central banks to coordinate their actions and “clearly communicate policy decisions” to “reduce the magnitude of the tightening needed.”<\/p>\n<\/div>\n

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    Inflation, the rate at which prices are rising, hit a 40-year high in the US and UK in recent months.<\/p>\n<\/div>\n

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    This was due to higher demand as pandemic restrictions eased and the war in Ukraine pushed up energy, fuel and food prices.<\/p>\n<\/div>\n

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    In response, central bank policymakers have raised interest rates to dampen demand from households and businesses.<\/p>\n<\/div>\n

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    However, sharp hikes in interest rates increase the risk of a recession as it can cause the economy to slow down.<\/p>\n<\/div>\n

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    Central banks generally do not make policy decisions about their counterparties.<\/p>\n<\/div>\n

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    However, in the past they have coordinated their actions to support the global economy.<\/p>\n<\/div>\n

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    In 2007, a global financial crisis was triggered by a US subprime mortgage crisis.<\/p>\n<\/div>\n

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    After the collapse of the investment bank Lehman Brothers in September 2008, this developed into a full-blown crash.<\/p>\n<\/div>\n

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    A month later, the Fed, together with the European Central Bank and central banks in Canada, Sweden and Switzerland, jointly cut interest rates.<\/p>\n<\/div>\n

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    They said in a statement that “the deepening of the financial crisis has increased downside risks to growth and thus further reduced upside risks to price stability.”<\/p>\n<\/div>\n

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    “Therefore, some easing in global monetary conditions is warranted,” they added.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Rate hikes by central banks around the world could trigger a global recession in 2023, the World Bank has said. Central banks have hiked rates “with a synchronicity not seen in the past five decades” to counter rising prices, it said. 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