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Several central banks weigh further interest rate increases

Several central banks are signaling further rate increases to fight inflation. A UK think tank warns the Bank of England may keep rates high for longer, and the ECB's Joachim Nagel sees a strong case for a December hike.

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A UK think tank, the National Institute of Economic and Social Research (Niesr), argues that the Bank of England's measured approach to price rises could keep borrowing costs elevated for a long time. It called last week's rate increase too small. Niesr expects inflation to stay above the Bank's 2% target until at least 2030.

The same group warned that the Bank may have to raise borrowing costs to 5%. Its comments came as policymakers from the UK, US and the eurozone met in London and laid groundwork for further increases.

Bank of England Deputy Governor Clare Lombardelli said the UK's 'low-hire, low-fire' job market could make it harder to ease wage pressures. She also said interest rates are likely to rise again.

Across the euro area, Joachim Nagel, a member of the European Central Bank's Governing Council, said there is a strong case to raise rates in December. He described inflation as 'too high' in an interview in Riga on Tuesday.

Elsewhere, the Bank of Canada raised rates to limit inflation risk, its minutes show. Riksbank officials see a rate hike over the coming months, and the Bank of Japan's October summary said hikes should continue. In Hungary, inflation picked up while rates were seen staying steady, and in Norway core prices cooled, which weakens the case for a hike.

Poland's Maslowska sees a growing case for a January hike. Elevated inflation keeps pressure on the Federal Reserve to raise rates.

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