Fed hikes rates again and warns of more rises

The US central bank has hiked interest rates again, and warned more rises will be necessary to rein in the rapid pace of price increases.

Forecasts from the Federal Reserve showed the bank's key interest rate could remain above 5% a year from now.

But policymakers are starting to move more cautiously, following signs that the most severe inflation in decades may be starting to ease.

They agreed to lift the bank's key interest rate by 0.5 percentage points.

That lifted the target range for the Fed's benchmark rate to 4.25% - 4.5% - the highest rate in 15 years.

But it was a smaller increase than in recent announcements.

The Federal Reserve has raised interest rates at an historically rapid pace this year, responding to inflation that is running at a 40-year high.

By raising borrowing costs, the Fed is hoping to cool the economy and ease the pressures pushing up prices. But it wants to avoid triggering a more painful slowdown than necessary.

Central banks in other countries are grappling with similar risks.

The Bank of England, which has warned the country is facing its longest recession on record, is expected to announce its own 0.5 percentage point hike on Thursday, after approving an even bigger rise last month.

But policymakers are starting to move more cautiously with signs that the country's most severe inflation in decades may be starting to ease.

They agreed to lift the bank's key interest rate by 0.5 percentage points, pushing it to a 15-year high.

But that was a smaller increase than in recent announcements.

The Federal Reserve has raised interest rates at an historically rapid pace this year, responding to inflation that is running at a 40-year high.

The latest increase, effective from Thursday, is the seventh in a row.

It lifted the target range for the Fed's benchmark rate to 4.25% - 4.5%, up from nearly zero in March.

By raising borrowing costs, the Fed is hoping to cool the economy and ease the pressures pushing up prices. But it wants to avoid triggering a more painful slowdown than necessary.

Central banks in other countries are grappling with similar risks.

The Bank of England, which has warned the country is facing its longest recession on record, is expected to announce its own 0.5 percentage point hike on Thursday, after approving an even bigger rise last month.