World stocks are headed for their worst week since the markets' pandemic meltdown in March 2020, as investors worry about growth in the face of global rate hikes.

This week the US Federal Reserve, the Bank of England and the Swiss National Bank all raised rates, in an attempt to fight soaring inflation.

The Bank of Japan however, kept its interest rates unchanged today at odds with other major central banks.

The European Central Bank plans to raise its interest rates in July and September.

European stocks edged higher today, but are set for sharp weekly losses.

"There is unlikely to be sustained relief from the sinking feeling that has hit financial markets this week," Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown, said in a note.

"The knot of worry about the tricky economic times ahead isn't likely to go away any time soon."

Several regional markets are nearing or have marked a 20% decline from their recent peaks, called a 'bear market'.

Bonds and currencies were jittery after a rollercoaster week.

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US labour and housing data came in soft on Thursday, on the heels of disappointing retail sales figures, with the worries knocking the dollar and helping Treasuries.

Benchmark US 10-year Treasury yields fell nearly ten basis points overnight but wobbled higher to 3.2502% during early European trade.

Yields rise when prices fall.

Southern European bond yields dropped sharply today, though, after reports of more detail from ECB President Christine Lagarde over its plans to develop a tool to support yields.

In recent sessions, the dollar pulled back from a 20-year high, but it has not fallen far and was last up 0.3%, on course to end the week steady against a basket of currencies.

Sterling rose 1.4% yesterday after a 25 basis points rate rise and held gains into today as it heads for a steady week. Two-year gilts were last at 2.066%.

"If a central bank does not move aggressively, yields and risk price in more in the way of rate hikes down the road," said NatWest Markets' strategist John Briggs.

"Markets may just be continuously adjusting to an outlook for higher global policy rates ... as global central bank policy momentum is all one way."

Growth fears took oil on a brief trip lower before prices steadied.

Brent crude futures were last at $120.55 a barrel.