Major central banks strike a more hawkish tone as energy costs jump

By Stefano Rebaudo and Sophie Kiderlin

Sept 10 (Reuters) - Persistent inflation pressures and resilient economic growth have increased the risk of further rate hikes by major central banks, as energy prices rise and Middle East tensions show little sign of easing.

The European Central Bank hiked rates by 25 basis points on Thursday, while next week's much-anticipated U.S. and Japanese central bank meetings could bring monetary tightening too.

Here's where central banks in the Group of 10 developed economies stand, ranked from highest to lowest policy rate.

1/ AUSTRALIA

The Reserve Bank of Australia has hiked interest rates three times this year to 4.35%, entirely undoing last year’s cuts.

The door to another hike looks firmly open, especially after a hot July inflation print. The central bank’s deputy governor said policymakers would debate the case for a hike at their meeting later this month.

Market expectations are tilted towards the central bank hiking then.

2/ NORWAY

Norway has one of the highest rates in the G10 and is likely nearing the end of its hiking cycle. Norges Bank, which meets on September 24, left rates unchanged at 4.25% in August and noted that inflation had softened.

The economy meanwhile grew at a slower pace than economists had expected in the second quarter, at just 0.3%, while markets price in one more quarter-point hike by year-end.

3/ BRITAIN

The Bank of England is expected to keep rates unchanged next week, at 3.75%. Market attention will likely fall on how rate-setters vote. In July, three of them wanted a hike.

Markets are pricing in a rate increase before year-end, while Governor Andrew Bailey seems keen to stick with his wait-and-see approach.

4/ UNITED STATES

Markets head into the Federal Reserve's meeting next week anticipating more than a 50% chance of a rate hike, meaning there's scope for a surprise.

Recent economic data, including last week's strong jobs numbers and comments from Fed officials, moved the needle in favour of a more hawkish policy outlook.

Fed Chair Kevin Warsh said he would avoid "forward guidance", which he argued ties the hands of policymakers and sets public expectations that may need to be changed.

5/ NEW ZEALAND

The Reserve Bank of New Zealand hiked rates for the second consecutive meeting to 2.75% earlier this month, as expected. But it also hinted that more tightening would likely be measured as risks to the economic outlook grow.

Markets are pricing in a high chance of another hike by year-end.

6/ EURO ZONE

The European Central Bank raised rates for the second time this year on Thursday and struck a hawkish tone as energy prices rise.

Markets price in at least one further hike by year-end and a deposit rate above 3% in 2027. But some economists expect the energy shock to weigh on economic growth and help curb inflationary pressures into next year.

7/ CANADA

The Bank of Canada left rates on hold last week, but Governor Tiff Macklem said it could raise rates multiple times if inflation remained elevated.

That marked a departure from his previous messaging that upside risks to inflation and downside risks to growth were broadly balanced.

Since then, signs of a cooling labour market have emerged and trade tensions with the United States cloud the economic outlook. Still markets price in another hike by year-end.

8/ SWEDEN

Sweden's Riksbank is in the dovish camp, and expected to keep its key policy rate at 1.75% when it meets later this month.

August inflation figures came in below expectations, cementing that view.

Still, markets expect rates to rise later this year.

9/ JAPAN

The Bank of Japan is expected to hike rates to 1.25% at a highly anticipated meeting next week, but investors will be keen to see how hawkish policymakers sound after the meeting.

Expectations for rate hikes have helped spur a stunning rally in the yen, while some BOJ members have hinted at the need for rapid rate hikes if inflation accelerates.

Economists polled by Reuters expect rates to rise to 1.75% in the second quarter of 2027, earlier than previously thought.

10/ SWITZERLAND

Markets expect the Swiss National Bank to hold its key rate at 0% when it meets on September 24 and leave it there well into next year.

Data showing a rise in consumer prices and strong economic growth have raised the prospect of an earlier move. Still, a strong Swiss franc has helped dampen inflation, reducing the need for tightening.

(Reporting by Stefano Rebaudo in Milan and Sophie Kiderlin in London; Editing by Dhara Ranasinghe and Joe Bavier)