2025 Interest Rate Increases by Central Banks Worldwide: How Much and Why
Explore how central banks globally are aggressively raising interest rates in 2025 to combat inflation, with detailed insights on key economies' rate hikes.
Global central banks are adopting similar strategies to tame inflation by raising interest rates.
Despite diverse political systems and economic circumstances, countries worldwide are largely following a unified approach to curb inflation: their central banks are steadily increasing interest rates.
For instance, in 2024, the Bank of England raised its benchmark rate by 25 basis points to 4.25%, marking a 14-year peak, closely mirroring the U.S. Federal Reserve's recent 25-basis-point hike.
These rate increases elevate borrowing costs across various loan types, aiming to cool down overheated economies, decrease demand for goods and services, and restore balance between supply and demand—ultimately helping to stabilize rising prices. Central banks across major economies are deploying these measures to alleviate the strain of soaring living costs.
The interactive chart below highlights the extent of rate hikes implemented by central banks in key global markets throughout 2024.
One significant outlier is Turkey, which has defied conventional economic wisdom by reducing interest rates despite inflation soaring over 85% as of October 2024.
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