Economists at HSBC Holdings PLC anticipate that more central banks will raise their policy interest rates, even if the United States and Iran reach a peace agreement in the near term. In a report, Janet Henry and Bethan Ellis stated that the risks from supply shocks and their impact on global inflation and growth are likely to persist, regardless of a swift reopening of the Strait of Hormuz. They noted that current rate hikes are increasingly motivated by credibility concerns. Central banks in Australia and Norway, which were already addressing inflation pressures prior to the conflict, had hoped that their May rate increases would be the final ones. The economists suggested that the European Central Bank and the Bank of England might commence rate hikes in June or July, and that more emerging market economies could tighten monetary policy if the Federal Reserve raises rates. HSBC forecasts further rate hikes in the Philippines and now expects India and Indonesia to increase rates in the second half of the year.
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