Strategy workbench

A New Phase in the Interest Rate Cycle: Rethinking Monetary Policy Divergence in the US, UK, and Europe and Global Asset Allocation

After major central banks shifted toward easing following a period of substantial tightening, the Middle East conflict has introduced new uncertainties into the inflation outlook. The Bank of England held its rate at 3.75%, the United States paused at 3.50%–3.75%, and the European Central Bank unexpectedly raised its rate to 2.25%. This article interprets the potential implications of policy divergence for long-term investment trends and capital flows.