Central banks in Switzerland and the United Kingdom raised interest rates further on Thursday. They did this despite concerns about the imminent collapse of Swiss bank Credit Suisse. Following the earthquake in Turkey, interest rates remained unchanged.
Many countries have strong inflation. To prevent prices from rising too fast, central banks raise their interest rates. For example, the European Central Bank (ECB) and the US Federal Reserve recently decided to raise interest rates.
This makes saving more attractive, while borrowing becomes more expensive. This should ensure that companies and consumers spend less money, causing prices to rise more quickly.
On Thursday, central banks in Norway, Switzerland and the UK also decided to raise their interest rates further. They did this at a time when high interest rates were actually contributing to the recent turmoil in the banking world. So some analysts expected interest rates not to rise.
One exception was the Turkish central bank, which announced on Thursday that it would keep its rate at 8.5 percent. The country was hit by a devastating earthquake last month. According to the Turks, the current tariff will help revive the Turkish economy.
