Why central banks, including RBI, are raising lending rates aggressively

It is crucial to note that even though high interest rates combat inflation, the subsequent possibility of a decrease in demand may have a negative effect on the economic growth in the long run

Countries across the world have been grappling with unprecedented levels of inflation. In the US, the inflation rate has increased by an unparalleled amount of 8.6 per cent in May 2022, reaching a forty-year high. Across the OECD group of wealthy nations, inflation has reached 9.2 per cent - the highest since 1988. Britain has the highest rate in the G7 group of rich countries - the UK, US, Canada, France, Italy, Germany and Japan - with the consumer price index (CPI) measure of inflation hitting 9 per cent in April, the highest since 1982, a report published by The