Why are some central banks raising rates and others holding them?

IN 2025, financial markets expected the world’s major central banks to be moving towards lower interest rates. Today, a better question may be: Who is not raising them, and why?

First, some major banks have tightened policy: The European Central Bank (ECB) raised rates on Sep 10; the US Federal Reserve followed on Sep 16, lifting rates for the first time in three years; and the Bank of Japan (BOJ) hiked its policy rate to 1.25 per cent, its highest in 31 years, on Friday (Sep 18).

As for the others: the Bank of England (BOE) and Reserve Bank of India (RBI) held rates, and China is expected to stand still.