Central Banks in Europe, the UK and the US raised interest rates this week as the battle to fight inflation continues.

The US Federal Reserve raised rates by 25 basis points - the smallest increase since last March.

The European Central Bank raised interest rates by 50 basis points yesterday, bringing its cumulative tightening to 250 basis points in just over seven months.

This marked the fastest pace of tightening in the ECB's 23-year history.

The ECB started raising rates four months after the Fed, and it is probably too simplistic to think that the ECB will follow the Fed and slow the pace of rate rises in four months time.

Economist Simon Barry said one important difference is not just that the ECB started after the Fed, it has also done quite a bit less than the Fed.

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"The Fed has raised interest rates by 4.5 percentage points, the ECB has only raised rates by 3, so there's quite a difference. The Fed is beginning to see underlying inflation starting to come down, that's not the case in Europe just yet."

The ECB signalled that its policy rates are likely to rise by another 50 basis points next month.

When asked at the press conference after yesterday's governing council meeting if rates might reach their peak in March, ECB president Christine Lagarde said, "No, no, no, no, we know that we have ground to cover. We know that we are not done."

"I think it's a little early for the ECB to be comfortable and satisfied with where we are at, and the key problem is that inflation is extremely high," Mr Barry said.

"The ECB's target is to have inflation at around 2% and depending on the measure of inflation, it's 8.5% or even if you strip out some of the really volatile elements that make up inflation, core inflation is still over 5%," he said.

"It's going to take time for the ECB's policy actions to kick in and have the desired effect in bringing both headline inflation and more importantly underlying inflation and getting that back down on a trajectory towards 2%," he added.