US rate hike sets scene for ECB meeting at lunchtime tomorrow

Bank of Ireland hiked its fixed-rate mortgage loans ahead of ECB meeting

Eyes turn to the incoming ECB rate decision due lunchtime tomorrow. Picture: Michael Probst/PA

The Federal Reserve raised rates by a further quarter point tonight, even as US inflation has fallen sharply, and kept markets guessing whether it will soon stop a hiking campaign to rein in inflation.      

The decision by the US central bank sets the scene for the meeting of the European Central Bank (ECB) tomorrow, as the debate also rages in Europe about whether enough has already been done without running the risk of inadvertently sparking recession and sending households into debt. US inflation is significantly lower than that of the eurozone.