Oliver Mangan: Central banks to keep the pedal to the floor over rate hikes

Banks indicating policy will need to be kept tight for a long time to return inflation to target

The European Central Bank has given a clear signal that rates will be hiked by half a point at its March meeting, bringing rates up to 3%.

The shift by global central banks to smaller rate hikes is not a signal that monetary tightening is about an end — they have continued to emphasise the battle to bring inflation back under control and restore price stability is far from won. 

They have been guiding that further hikes are on the cards and rates will need to go higher than previously anticipated, moved to quell expectations of rate cuts before year-end, and indicated policy will need to be kept tight for a long time to return inflation to target.