No rate cuts ahead in Europe: Two global central banks strike contrast with Fed

• These central banks have moved in lockstep over much of the last two years to swiftly raise rates as inflation soared.
• However, 2024 is shaping up to see global policymakers diverge.

What's new: The Bank of England kept rates at a 15-year high, while the European Central Bank held borrowing costs at a record high.

• Both central bank leaders suggested that rates would need to hold at these levels to battle persistent inflation.

What they're saying: In a statement, the Bank of England said rates need to be high "for an extended period of time."

• "We've come a long way this year," Andrew Bailey, the head of the central bank, said in a letter. "But we still have some way to go."
• "We don't want to lower our guard, we believe there is work still to be done. That can very much take the form of holding" rates steady, European Central Bank President Christine Lagarde said during a press conference on Thursday.
• "We did not discuss rate cuts at all. No discussion, no debate," Lagarde later said.

Of note: The European Central Bank announced that it would speed up its exit from a pandemic-era bond buying program.

What to watch: Unlike the still-solid U.S. economy, the euro area and U.K. economies have faltered in recent months — raising fears about further economic damage of holding rates too high as inflation recedes.

The bottom line: Rate cuts are ahead in the U.S.

• Across the Atlantic, that's less of a sure thing.