In an effort to curb inflation, the US central bank raised its key rate by 0.25% this week, marking the ninth consecutive rate hike. Despite being lower than what banks expected prior to the SVB/Credit Suisse issues, the Fed emphasized the possibility of taking further action if inflation persists. While policymakers expect inflation to decrease this year, it is projected to fall less than previously anticipated.

Meanwhile, UK inflation came in higher than anticipated, jumping to 10.4% in February from 10.1% in January. This is in contrast to the US and Eurozone, where inflation is beginning to ease. The continued rise in food costs played a significant role in the inflation figure, along with higher prices for alcohol and clothing. However, fuel prices continue to decline.

As a result of the inflation figure, the Bank of England raised rates to 4.25%, the highest since 2008, in its eleventh consecutive rate hike. Andrew Bailey and his colleagues are striving to keep inflation in check, and have indicated they may implement further rate hikes if necessary. However, it is unlikely that inflation will rise significantly over the year, and some market participants believe rates may have already peaked.

Sterling has once again outperformed, reaching a monthly high of 1.2330 against the dollar, while the euro remains well-supported around 1.1330 on the exchanges.