Decision on interest rate rise on knife-edge amid banking crisis fears

While inflation remains high, traders are now uncertain if Bank of England and US Federal Reserve will hike rates - and how much

Central banks on both sides of the Atlantic are facing one of the toughest calls on interest rates in years, as concerns over the worst banking crisis since 2008 cast doubt on the need for further action to reduce sky-high inflation.

Financial markets expect the US Federal Reserve to raise its main rate by 0.25 percentage points on Wednesday, down from predictions just two weeks ago for the US's central bank to increase borrowing costs by twice that amount.