News & Reports Archives

Federal Reserve Keeps Interest Rates on Hold

Written by IntaCapital Swiss on October 29, 2026. Posted in News & Reports. Leave a Comment

28^th October 2026

Today, the Federal Reserve’s Federal Open Market Committee (FOMC) by a vote of 10 – 2 kept interest rates on hold in a target range of 3.75% – 4.00%. The two dissenting members were Governor Lisa Cook and Cleveland Federal Reserve President, Beth Hammack, who both favoured an increase in rates of 25 basis points. However, officials noted that they were still committed to keeping inflation under control, but had no clear opinion as to whether or not interest rates would be raised at the next FOMC meeting in December.

Interestingly, the decision to keep rates on hold comes less than a week before the mid-term elections, where President Trump and the Republican Party are expected to lose control of the lower house, the upper house (the Senate) polls showing a leaning towards a Democrat majority. However, financial and political commentators have said there is no reason to believe that the vote was politically motivated, despite concerns over inflation where data released for the September Consumer Price Index (CPI) showed the index having risen at its fastest pace for five months.

Experts pointed out that the rise in the September CPI figures was driven to a greater extent by the on-going conflict with Iran, however, additional data released showed broad-based inflation across goods and services. Indeed, after the meeting, Chairman Warsh said, “Inflation is too high. Energy and related prices have moved higher again in recent weeks, and our job is to ensure that relative price changes in some sectors do not broaden out across the economy”. Financial markets had already expected today’s decision, as top officials had previously briefed that they saw no reason to raise rates again after a 25 basis point rise at the previous FOMC 15 – 16 September meeting, despite the fact that on-going inflation data was stronger than originally forecasted.

Furthermore, a FOMC policy statement said, “The accumulation of more information will help the committee determine the policy stance appropriate to ensure a timely return of inflation to the committee’s goal of 2.00%. The committee will deliver price stability”. Financial markets have already priced in a December interest rate increase despite the Federal Reserve’s commitment to further data before deciding on a rate increase. However, many experts suggest that inflation will not be falling. All in all, analysts suggest that this was a wait and see decision saying that a rate rise in December is a foregone conclusion, so why wait? Still, the spectre of politics looms over this decision, although Chairman Warsh was adamant that was not the case.

French Government Bonds Suffering From Investor Negativity

Written by IntaCapital Swiss on October 28, 2026. Posted in News & Reports. Leave a Comment

As last week drew to a close on Friday, 24th October, financial markets witnessed historic turbulence in French government bonds, with concerns regarding public debt and severe political unrest acting as the main culprits. Experts note that investors have growing doubts about the future of the French economy – citing a massive debt burden, sluggish growth, and demonstrations spilling over into the streets. Holders of 10-year bonds are now demanding a premium to hold French sovereign debt, with yields rising by as much as 13 basis points to 5.14%. Concurrently, the premium of French 10-year bonds over German Bunds widened by 19 basis points, driving the spread to 1.78 percentage points. The last time markets witnessed a spread of this magnitude was in 2011, when the Eurozone Debt Crisis* reached its zenith.

* Eurozone Debt Crisis – Reached a critical existential boiling point, morphing from an isolated, localised issue in Greece into a systemic threat that brought the single currency area to the brink of collapse. Contagion spread rapidly from smaller economies to larger ones such as Italy, Spain, and Portugal. Greece and Ireland both required bailouts in 2010, followed by Portugal in 2011.

The problem was that domestic banks held massive amounts of government debt, and as bond values rapidly headed south, banks neared insolvency, requiring government bailouts that plunged them deeper into debt. Furthermore, eurozone countries were trapped inside a shared single currency, and the heavily indebted nations (like Greece and Italy) could not artificially lower currency values to stimulate trade and export growth.

In the end, the European Central Bank (ECB) stepped in late December 2011 by deploying its Long-Term Refinancing Operation (LTRO), pumping circa EUR 490 Billion in ultra-cheap three-year loans directly into commercial banks, staving off what would have been a nightmare credit freeze. Ultimately, in 2012 ECB President Mario Draghi (in office 2011 – 2019) pledged “Whatever It Takes”, which finally turned the tide.

Experts suggest that France is facing one of its worst political and fiscal crises in recent memory, with the consequences reverberating through its government bond market. Indeed, rioting and protests throughout the country are the backlash against government austerity programmes putting on pressure to reduce the government deficit. The government hopes to bring the deficit down from 5.40% of GDP to 5.00% through 2027 via an EUR 54 Billion fiscal adjustment package. However, analysts advise that public debt is expected to breach 120% of GDP*, whilst annual interest payments are expected to hit circa EUR 92 Billion up from a previous estimate of circa EUR 79.20 Billion.

* EU Fiscal Rules – European Union fiscal rules dictate that member states must keep annual budget deficits below 3.00% of GDP and total public debt below 60.00% of GDP.

Even before the protests began, the French sovereign bond markets were already under pressure rattled by months of political and fiscal uncertainty. On Monday 19^th October, the yields on government bonds were already rising with the 10-year already up by 8 basis points to 4.86%, the 2-year yield rising to 3.64%, and the 30-year yield climbing to 5.40%. The French government bond market is making life difficult for the ECB because as the spread between French and German government bonds widens, the ECB is tasked on the one hand to prevent sovereign stress from accelerating whilst also tasked with taming inflation.

Analysts confirm that France has one of the highest deficit-to-GDP ratios within the eurozone and furthermore advise that the economy has literally slowed to a crawl – with the growth forecast for year-end 2026 being cut by the government to 0.50%. Financial markets feel that if borrowing costs stay high, then refinancing costs will be at a higher rate incurring heavier debt. Some political commentators think that French politicians will, given the current protests shy away from putting France on a sustainable debt reduction path, which according to analysts, may well increase sovereign bond yields as investors continue sell French government bonds/OAT*.

*OATS (Obligations assimilables du Trésor) – The primary medium and long-term sovereign debt instruments issued by the French government. These bonds are managed by the AFT (Agence France Tresor) and serve as the foundation bedrock for financing France’s state expenditure. Standard OATs are issued with fixed maturities ranging anywhere from 2 – 50 years.

However, it is not all doom and gloom, as last Friday 23^rd October, top ratings agency Moody’s spared France a credit rating downgrade leaving it at Aa3 (High Grade Investment Grade), which is equivalent to an AA- rating with Moody’s and S&P (Standard and Poors) rating agencies. However, bond markets had been pricing in a downgrade for France by Moody’s as the other two rating agencies had already downgraded Frances’ sovereign rating to A+ (Upper Medium Investment Grade). In a statement, Moody’s said that “The Aa3 rating assumes that a deficit reducing budget for 2027 will be adopted, while financing costs and social tensions will abate somewhat in the next few months”.

South Africa Could Regain Investment Grade Status

Written by IntaCapital Swiss on October 21, 2026. Posted in News & Reports. Leave a Comment

According to experts on South Africa’s economy, the country stands a good chance of regaining sovereign investment grade status by 2028. Next week, the South African Minister of Finance, Enoch Godongwana, will lay out his mid-term budget and he is expected to confirm continuing growth in the country’s budget surplus. He is also expected to give details on a fiscal framework that ensures long-term discipline. Coupled with expected budget surplus growth, this should help propel the country toward an upgrade in its sovereign credit rating.

Experts suggest that the upcoming budget announcements need to confirm debt service costs have topped out and will start to head south, whilst debt to GDP is on or expected to decline. Spreads in the Credit Default Market* suggests that financial markets are expecting two ratings companies, Moody’s Ratings and S&P Global ratings, to move South Africa’s current rating up one notch to just below investment grade status. Both Moody’s and S&P have given a “positive outlook” (up from stable) to South Africa’s credit assessment together with a current rating of Ba2 and BB respectively, with expected upward movement to Ba1 and BB+ respectively.

*Credit Default Swap spread (CDS) – When a country’s sovereign credit rating increases (or is expected to increase), its CDS spread narrows. A lower CDS spread means the market views the country/nation as less likely to default on financial obligations, reducing the annual insurance cost paid to protect against its debt.

A CDS is a financial derivative that allows an investor to transfer or “swap” the credit risk of a borrower with another party. A CDS is obtained by entering into a bilateral OTC (Over-the-Counter) derivative contract with an institutional counterparty such as a bank, a hedge fund or financial institution. JPMorgan Chase is currently widely recognised as the most active global dealer and writer of Credit Default Swaps, whilst other key market players are Goldman Sachs, Morgan Stanley and Citigroup.

For credit rating purposes, a more relevant measure of the debt service burden is interest costs as a percentage of consolidated government revenue. Experts note that this figure should land close to the 11% mark. Experts confirm that South Africa’s figures have been around the 18% – 19% mark, and the government will have to demonstrate that they are able to reduce this number. Analysts are suggesting a medium-term range of 16% – 17% would likely support a move by the rating companies to move the country back to an investment grade rating.

Trump, Putin and an Energy Deal

Written by IntaCapital Swiss on October 14, 2026. Posted in News & Reports. Leave a Comment

On Friday the 9^th of October and in one of biggest sanction busting deals on record, President Donald Trump suspended sanctions on exports of Russian diesel until the 7^th of April 2027, allowing Russia to release diesel into the United States and global markets. Russian diesel exporters immediately supplied 300,000 metric tons of diesel, with plans for up to 4.8 million metric tons. In exchange for this Russian gesture, President Trump demanded an immediate halt to Ukrainian drone strikes on Russian energy infrastructure, declaring last Sunday that an immediate energy ceasefire was in place. However, this sanction busting deal of the century has triggered a cascade of complications, diplomatic rifts and domestic political resistance.

Indeed, on Tuesday the 13^th of October 2026, a bipartisan coalition of 12 US senators (six Democrats and 6 Republicans) sent a heavily worded letter to President Trump demanding he cancels the deal with Russia. US lawmakers suggest this deal with Russia serves as a multi-billion dollar financial lifeline to Moscow that will directly fund Russia’s illegal war with Ukraine. Senators and other critics of this diesel deal argue that it contradicts the bipartisan Russian sanctions law that Trump signed into law a few weeks before he announced the deal with Putin, which required the lifting of sanctions. This deal also drew heavy criticism from the President of Ukraine, Volodymyr Zelensky, who relies on the US for military support. In his response, President Trump ripped into President Zelensky saying Ukraine should get a new President.

Indeed, it appears that the Ukrainian president is on a collision course with President Trump, whose relationship has been of a very up and down nature. Experts suggest that President Zelensky feels that the deal made with Moscow is more of a political nature rather than an effort to bring down the price of diesel at American gas stations. He feels, along with numerous other critics in the US and other countries, that this is just political grandstanding in the hope that the Republican party does not get humiliated at the mid-term elections on Tuesday the 3^rd of November. A number of well-known and seasoned political experts in the United States suggest the Republicans are ‘in for a beating’ and that the Russian diesel deal could backfire on Republicans who have a small majority, as disaffected voters could either stay away or transfer their vote to the Democrats.

In Europe, some European Union (EU) officials warned that the diesel deal President Trump has made will increase the fighting potential of Moscow’s war machine in its war with Ukraine. The deal has been badly received by EU foreign ministers, who point out this agreement with Moscow undermines transatlantic unity, especially at a time when Russia is intensifying attacks on Ukraine. The word coming out of the EU is that they will continue to apply and increase sanctions on Russia, despite the recent diesel deal struck between President Trump and President Putin. Indeed, High Representative Kaja Kalla recently opined, “The US is our biggest ally, but our message is clear: if we want to end this war, the only way we can do this is by putting more pressure on Russia”*.

*More pressure on Russia – On the sanctions front it should be pointed out that the EU has hardly covered itself in glory. Whilst the EU’s Foreign Ministers gathered in Luxembourg on Monday the 11^th of October regarding further sanctions on Russia and denouncing the Trump/Putin deal, data released shows the EU still imports circa 1 billion to 2 billion euros a month of Russian fossil fuels.

Experts in the diesel arena suggest that the diesel deal will have little effect on prices at the pumps and the squeeze on diesel is expected to carry on into 2027. The current high price of diesel in the US is down to President Trump, with experts saying that the war with Iran is responsible for the sky high prices. Interestingly, almost seven years ago, Nancy Pelosi (Former US House Speaker) in a heated White House meeting along with several US Officials, accused President Trump and his policies of favouring Russia and President Putin. President Trump has hailed the deal as an energy ceasefire but President Zelensky said Putin had not read the script and has continued attacking Kiev.

All in all, President Trump has failed to rid Iran of its leadership, in fact many analysts suggest that the government in Iran is even more hardline than before, and the current sanction busting diesel deal with Russia could well be his final nail in the coffin when the midterm elections arrive in less than three weeks. If the Democrats win, and win big, then experts advise if the Democrats win both houses, they will have the power to subpoena documents and testimony. Democrats have for two years been salivating over the prospect of impeaching President Trump and the diesel deal say experts may well have handed them the opportunity on a plate.

Reserve Bank of India Raises Interest Rates

Written by IntaCapital Swiss on October 8, 2026. Posted in News & Reports. Leave a Comment

7^th October 2026

Today, and for the first time in nearly four years, the Reserve Bank of India (RBI) raised its benchmark repo rate by 25 basis points to 5.50%. The six member Monetary Policy Committee (MPC) voted unanimously to raise rates, and by four votes to two to shift its stance from neutral to what officials describe as, “Calibrated Tightening*” in a bid to head off inflation. The last time the RBI raised its benchmark interest rate was back in February 2023, which marked the end of its post Covid-19 pandemic tightening cycle.

*Calibrated Tightening – A forward-looking monetary policy stance employed by central banks. It suggests a milder form of a rate hiking cycle, more data-dependent rather than a premeditated outlook. It also indicates that rate cuts are off the table and future interest rate policy will only involve rate increases or keeping interest rates on hold.

The Governor of the RBI, Sanjay Malhotra, said in a post meeting statement ,“the bank would strive for price and financial stability as both are essential for sustainable growth in the long run”. Indeed, the RBI ‘s projections for GDP for the year end 2026 were increased by 40 basis points to 7.1%, due to the economy outperforming expectations in Q1. Signals coming out of the RBI suggest that the central bank will use a mix of liquidity tools at their disposal to keep liquidity under control, whilst at the same time striving to curb the current excess volatility in the Indian Rupee.

Governor Malhotra also went on to say, “Given the current conditions, rate cuts are off the table in the near term and policy action ahead can only be a rate hike or pause, depending on the evolving conditions and the outlook. The duration and extent of rate hike policy cycle would be contingent on actual growth-inflation developments and outlook”. The Governor noted that inflation is becoming generalised with increased price pressure across a bigger segment of the CPI (Consumer Price Index) basket, whilst officials noted its projection for inflation had increased by 0.20% to 5.20%, up from 5.00%.

Some analysts are predicting a total of ¾ of 1.00% or 75 basis points of interest rate hikes in the current cycle, with one economist being quoted as saying the “RBI has prepared markets for a higher-for-longer interest rate environment”. Indeed, data released for August showed that consumer inflation had risen to 4.82%, which is now close to the upper-end of the central bank’s tolerance level. To add to inflation woes has been the Indian Rupee’s slide, which has made imports more expensive – the weakest monsoon in over a decade is also adding to the risks of higher food prices.

The United States/Iran conflict has weighed heavily on countries across the globe, and India is no different as increased energy prices have negatively impacted their economy. Analysts suggest that the number and size of rate increases will depend on how the global energy shock, food inflation, broader inflation dynamics and the global tightening cycle evolve in the coming months. Analysts and economists are at odds with each other in deciding how many hikes in the current cycle the RBI will deliver. One end suggests no more hikes, whilst the other suggests three hikes with other experts somewhere in the middle. However, the spectre of the US/Iran conflict which continues unabated and the conflicting diatribe coming out of Washington and the White House will keep everyone guessing.

Global Sell-Off of Government Bonds

Written by IntaCapital Swiss on October 7, 2026. Posted in News & Reports. Leave a Comment

The month of September 2026 saw a massive sell-off in global government bonds starting at the end of August and accelerating into September. Indeed, by the 2^{nd of} September, many governments were seeing an increase in their costs of borrowing as the global sell-off showed no signs of slowing down. Analysts advised that Japan’s 10-year bond yield hit 3.00% for the first time since 1996, which was a bit of a milestone considering the economy was emerging from a period of ultra-low interest rates.

In the United Kingdom, 10-year government bonds/gilts yields accelerated to just under 5.30%, its highest level since June 2008. Experts within the government bond arena advised that investors had been dumping bonds due to inflation fears and spiralling deficits. In France, the government was experiencing its highest borrowing costs since the GFC (Global Financial Crisis 2007 – 2009) with the 10-year government bond yield hitting 4.14%, its highest level since 2008 with public debt exceeding 118% of GDP*.

*European Union rules state that member states must keep annual budget deficits (net borrowing) below 3.00% of GDP, and total public deficit debt below 60.00% of GDP.

Throughout September, global government bonds continued their sell-off, and in the fourth week, yields on 5 to 30-year US Treasuries hit multiyear highs with the 30-year treasury hitting just under 5.50%, the highest since 2005. Once again, the sell-off was highlighted by investors’ concerns regarding increasing government debt and inflation fears, plus a fresh jump in oil prices. Indeed, one expert noted that since the start of the war with Iran on 28^th February 2026, one of the main drivers of treasury yields had been the price of oil.

Recently, borrowing costs within the Eurozone spiralled on the back of the 10-year US Treasury yield rising by 0.50% to 5.34%, a level last seen at the beginning of the 21^st century. Many experts advise that the US government bond market, currently valued at circa $32 trillion, is an anchor for global finance. Recently, selling in the US Treasury market spread to Europe and the United Kingdom, where the yield on the 30-year gilt climbed to just over 6.00%—its highest level since 1998.

Elsewhere in Europe, the Italian 10-year government bond saw yields up 0.50% to 4.69% with analysts advising government bonds within the eurozone were suffering from spillovers due to sell-offs in French government bonds. Indeed, French government bond (OAT*) yields recently hit their highest levels since 2002. A severe sell-off drove the 10-year yield close to 4.96%, pushing the yield spread over German Bunds past the 140–150 basis point mark – its widest margin since the 2012 Eurozone debt crisis.

*Obligations assimiliables du Tresor (OATs) are the primary medium and long-term sovereign debt instruments issued by the French government. These bonds are managed by the AFT (Agence France Tresor) and serve as the foundation bedrock for financing France’s state expenditure. Standard OATs are issued with fixed maturities ranging anywhere from 2 – 50 years.

Global government bonds are experiencing a high volatility sell off, pushing sovereign yields across developed economies to their highest levels in over twenty years. This dramatic rout is driven by a potent mix of surging energy prices stemming from the US/Iran/Israel conflict in the Middle East, ballooning government debt, and on-going inflation fears. Whilst yields have significantly spiked, which are offering long-term income investors an attractive entry point, current elevated bond volatility is disrupting broader financial markets, forcing a global re-evaluation of central bank rate paths.

Experts predict structural macroeconomic pressures will keep global sovereign bond yields elevated for the foreseeable future. They predict a return to the ultra-low rates of the 2010 – 2020 era is unlikely to return given the current fiscal realities.

Euro Area Inflation to Stay Elevated

Written by IntaCapital Swiss on September 23, 2026. Posted in News & Reports. Leave a Comment

Senior figures from the ECB (European Central Bank) suggest that there is a second round of increased energy prices, which they anticipate will lead to persistent, higher inflation with increased costs hitting consumers’ pockets. Indeed, the ECB’s Chief Economist Philip Lane said, “we are now witnessing a second wave of price rises, not only in oil but also in gas. We believe this second wave of energy price rises should lead to higher and more persistent inflation, before a decline toward our target from mid-2027 onwards.

Analysts suggest that following the last increase in interest rates on the 10^th September 2026, it is expected that the ECB will hike rates for the third time since the start of the US/Iran war on 28^th February this year, possibly as soon as next month. Experts suggest that in the coming months, inflation for Q4 in the Eurozone could reach as high as 4.00%, with the latest ECB projections suggesting the average rate of inflation for 2026 being circa 3.00%. However, recent data suggests the euro area is experiencing its highest inflation acceleration in nearly three years with headline consumer growth jumping to 3.30%.

Household costs for Q4 within the eurozone will be driven by rising inflation with distinct cost pressures concentrated in energy, housing and food. Data reveals nearly 46% of household consumption goes to housing, water, energy, food, non-alcoholic beverages and transport. Indeed, figures show that energy inflation hit 14.30% by the end of June 2026, and will only increase further going into winter. Some economists are predicting that a harsh winter will weigh heavily on the consumer’s pocket.

How the Current Middle East Crisis is Stoking Inflation and Negatively Impacting Growth

Written by IntaCapital Swiss on September 23, 2026. Posted in Iran, News & Reports. Leave a Comment

Once again, Benchmark Brent crude oil has surpassed the $100/bbl mark this month, stoking inflationary pressures globally – including across the UK, EU, and United States. Japan is concerned about inflation overshooting its 2.00% target, while price growth remains elevated in Australia and negative pressures persist across Southeast Asia. Sadly, the conflict between the US and Iran carries on unabated, with experts advising that tensions have reached a critical flashpoint with President Trump mulling over whether or not to begin devastating military action, and Iran promising unlimited retaliation and a continued blockade of the Strait of Hormuz.

The on-going war between Ukraine and Russia is putting further strain on global energy supplies, with experts warning that the autumn and winter may witness a serious supply shock with negative consequences to both global growth and inflation. However, since the invasion of Iran on the 28^th February this year, and due to the unexpected resilience in the oil and gas trade, negative forecasts for global growth turned out to be incorrect. Indeed, thanks to a resilient global trading system, China’s pull-back from the crude market, the release of 400 million barrels from strategic reserves, and global preparations for energy shortages, crude oil prices ultimately held below previous record peaks.

Data released shows global growth on an annualised basis in Q2 of this year, growing at the same pace as Q1, (figures excluded the six members of the Gulf Cooperation Council*), with one expert also pointing to the huge investments in data storage and the boom in artificial intelligence (AI) being partially responsible. However, energy prices are finally making themselves felt, as on the 10^th September, the ECB (European Central Bank) increased interest rates by 25 basis points, citing inflationary pressures and risks to the downside of economic growth. Elsewhere, and last week, both the Federal Reserve (first time since 2023) and the BOJ (Bank of Japan) increased interest rates by 25 basis points, both citing inflationary pressures due to the above mentioned conflict.

*Gulf Cooperation Council – This council consists of six members including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Founded in Riyadh, Saudi Arabia on 25^th May 1981, its purpose is a political and economic alliance focused on security, trade and social development.

Whilst the price of oil is considered to be an inflation barometer for the global economy, it is the price of refined fuels that have traditionally fed through to inflation. Since the start of the Middle East conflict, refined fuel markets, including diesel, petrol, and jet fuel, have been tighter than the crude oil market. This is mainly due to high shipping costs and a lack of adequate refining capacity. Indeed, due to the Ukraine/Russia conflict, Russian production (despite being the third largest refiner), is at its lowest for over twenty years as sustained drone attacks by Ukraine has cut production this year by circa 30%. This year, diesel surpassed the $200 p/bl mark in both Europe and the US, with consumers in the US seeing $6.00 per gallon for the first time in recorded history.

Many observers note that AI investment has sustained growth, but the narrative surrounding AI and the global economy has shifted dramatically. According to analysts, AI remains a pillar of economic activity, but fears of a major tech-driven slowdown have taken centre stage following unprecedented calls by senior financial officials and from the industry’s own leaders to cut back on development. In a rare show of unity, the CEO’s of Open AI, Microsoft and DeepMind called to slow the development of increasingly capable AI, as safety advocates warned of existential threats. Last week on September 14^th, AI and semiconductor shares took a nosedive across global markets prompting debates as to whether the massive, debt-fuelled AI infrastructure boom was facing a structural downshift.

Experts suggest that a structural down shift within the AI arena, together with a prolonged energy shock emanating from the Middle East crisis, could severely cripple global economic expansion and risk a prolonged period of global stagflation. In today’s global economy, analysts advise that there is a tug-of-war between an energy supply shock – currently driven by the US/Iran conflict, the loss of the Saudi Arabian East/West Pipeline, the Strait of Hormuz blockade, and Houthi insurgent incursions on two strategic Red Sea islands – which is depressing economic growth. On the other hand, massive AI investment is a counter prevailing force. If the AI engine stalls while energy prices remain high, the global economy loses its cushion and growth could fall dramatically.

Bank of Japan Increases Interest Rates

Written by IntaCapital Swiss on September 18, 2026. Posted in News & Reports. Leave a Comment

18th September 2026

Today, the Bank of Japan (BOJ) raised its benchmark interest rate by 25 basis points to 1.25%, pushing borrowing costs to a new 31-year high and marking the highest interest rate level since 1995. The BOJ’s Monetary Policy Committee (MPC) decision to raise interest was passed by seven votes to two, marking the central bank’s sixth hike under the governorship of Kazuo Ueda. In a widely expected decision, the BOJ’s Policy Board voted by seven votes to two to increase interest rates, with analysts suggesting that increase comes amidst severe global and domestic economic pressure.

The move by the BOJ comes as many major central banks (apart from the Bank of England) are raising interest rates as inflation is being pushed up due to the energy crisis, which is a result of the United States/Iran conflict in the Middle East. The increase in the policy rate comes just three months after the BOJ voted to hike rates – the shortest interval between increases since 1990. It arrives at a time when US Treasury Secretary Scott Bessent has been actively pressing Japan to raise interest rates.*.

*Scott Bessent/BOJ’s interest rates – The US Treasury Secretary has been aggressively pushing the BOJ to raise interest rates to protect the US Treasury market, strengthen the Japanese Yen, and curb regional currency weakness. Indeed, with Bessent’s repeated calls starting earlier this month to Governor Ueda to hike interest rates, money markets had almost fully priced in the chance of a rate increase at the September policy meeting.

After the policy meeting, Governor Ueda noted that underlying inflation is approaching 2.00%, the banks focus had shifted from pushing prices up to target to guarding against inflation overshoot. He was quoted as saying, “if risks of underlying inflation overshooting 2.00% materialise, that could have a negative impact on Japan’s economy”, and in his strongest remark to date on the central bank’s resolve to combat price pressure through continued rate hikes It’s important to stabilise underlying inflation at 2.00%. Our policy phase has changed”.

The Governor went on to stress that back-to-back rate hikes of 50 basis points would not be ruled out, but stressed that the BOJ did not want to be forced into large moves that might unsettle financial markets, so the bank would move pre-emptively. Experts suggest that the Governor is keeping his options open to include further increases in interest rates, whilst keeping a close eye on the state of inflation in order for it to be stabilised. BOJ officials noted that economic and price developments are moving in line with its baseline forecast, however, there is a risk of underlying inflation moving away from its 2.00% target.

As for the future, some analysts expect the central bank to lift interest rates to 1.50% by the close of business 31^st March 2027 and to 1.74% by the close of Q2 2027. Experts advise that Japan is heavily dependent on energy imports purchasing circa 85% – to 90% of its total energy needs, and if the Middle East conflict carries on into 2027, the interest rates for 2027 predicted above may well turn out to be on the conservative side.

Bank of England Keeps Interest Rates on Hold

Written by IntaCapital Swiss on September 17, 2026. Posted in News & Reports. Leave a Comment

17^th September 2026

Today, the Bank of England’s (BOE) Monetary Policy Committee (MPC) voted by six to three to keep interest rates on hold, with the naysayers voting to raise the interest rate to 4.00%. The decision to hold rates steady comes despite the BOE’s counterparts, the European Central Bank (ECB) and the Federal Open Market Committee (FOMC) of the United States Federal Reserve, both increasing interest rates by 25 basis points due to rising inflation. In the United Kingdom, inflation has been rising to 3.10% (BOE benchmark target for inflation is 2.00%), but Governor Bailey feels that global energy costs have a limited effect on price and wage settings.

On the inflation front, data released yesterday by the Office of National Statistics (ONC) showed August’s inflation figure higher than the July figure of 2.90%, with rising petrol prices being the main driver to the current figure of 3.10%. Once again, the MPC voted as they did in the July meeting by six to three to hold interest rates, showing the committee is still deeply divided on how to respond to the surging energy prices caused by the on-going Middle East crisis being acted out between the United States and Iran. Experts suggest that the wait-and-see approach to inflation by the MPC will be severely tested by the ever increasing energy prices.

Analysts advise that a key point that emerged from yesterday’s data regarding the increase in headline inflation showed the wider economy had suffered less than expected from the spillover of increasing energy prices. The six MPC members who voted to hold interest rates had latched on to this piece of data as a major reason to keep interest rates on hold, despite the recent increase in the Middle East conflict and Saudi Arabia having to close its East West pipeline, a critical asset that bypasses the Strait of Hormuz. Other inflation data released by the ONC showed service inflation (a gauge for domestic pressure) holding steady at 3.40% and core inflation (excluding food and energy) also holding steady at 2.60%.

Governor Bailey noted that the global energy shock has so far had a limited effect on price and wages in the UK and he went on to say, “the longer volatility persists, the bigger the impact it will have on inflation and the more likely it is we will need to raise the bank rate”. Experts suggest that a hike in interest rates is likely on the table for the next meeting of the MPC on 5^th November 2026, who today confirmed it stands by ready to act, with risks being tilted to the upside. Analysts note that following recent economic data and MPC statements, money markets expect inflation to hit 4.00% in 2027. As a result, traders have fully priced in a rate hike by the end of the year, alongside a 50% chance of a second hike. With chances of the war in the Middle East coming to an end in the near future being virtually zero, analysts say the money market bet for one rate rise before the end of the year is a near certainty.