World Bank warns rising rates threaten global recession

Financial crises loom in emerging markets

The World Bank has issued a warning to central banks, suggesting the current trajectory of interest rate hikes may not be sufficient to avoid a global recession in 2023.

A new study from the organisation found that unless supply disruptions and labour-market pressures subside, the expected interest rate increases could leave global core inflation at 5%, almost double the pre-pandemic five-year average. While investors expect central banks to raise rates to almost 4% next year - a figure more than two percentage points higher than 2021's average - the World Bank predicts that rates might need to jump an additional two percentage points to reach inflation targets. Goldman Sachs forecasts UK recession to last until 2024 If this were met with a financi...