Central banks’ decisions to raise interest rates are starting to bear fruit in Western Europe, according to editor-in-chief Jasper Lukkezen of the economists’ journal ESB. ‘We’re getting to the point where the central bank is saying: ‘interest rates are high enough and the fallout is such that we have to stop it’.’

Today the central banks of Norway and Sweden announced that they will slightly increase interest rates. The Swiss and British central banks kept interest rates stable. In the UK, inflation in August turned out to be positive, resulting in stable interest rates. “You have to view central bank policy as a giant tanker: it takes a while before the impact is felt,” Lukkezen explained of the decision.

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According to Lukkezen, there are several conditions for reducing interest rates. “Core inflation should return to two percent, long-term inflation expectations should be slightly below two percent and the economy should start to weaken and support.”

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Türkiye

In Turkey, the central bank has taken a big step by raising interest rates from 25 to 30 percent. This has to do with Turkish President Erdogan’s policies, Lukkezen said, ‘he was re-elected at the end of May and then he said, we are implementing a completely different budget policy. And you see the consequences.’