The Bank of England is poised to raise interest rates for the third consecutive meeting on Thursday, as it continues its battle to rein in surging UK inflation.

The Federal Reserve looks set to raise interest rates for the first time since the onset of the COVID-19 pandemic on Wednesday, with uncertainty surrounding the future path of hikes ensuring that this week’s meeting will likely be a highly important one.

The ECB’s unambiguously hawkish messaging last week did not stop the euro from sinking to new lows as concerns mount over stagflation or worse.

The euro briefly rallied against its peers on Thursday after the European Central Bank announced that it was winding down its asset purchase programme faster than originally anticipated, despite the downside risks to growth posed by Russia’s invasion of Ukraine.

Most risk currencies rallied on Wednesday, as an easing in commodity prices allayed global growth fears and buoyed risk sentiment in financial markets.

It’s been another volatile few days in financial markets so far this week, as investors continue to react to news out of Ukraine and the response of the western world to Russia’s invasion.

As if there wasn’t already enough uncertainty heading into Thursday’s European Central Bank meeting, Russia’s full-scale invasion of Ukraine in late-February has added yet another layer.

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The worsening humanitarian and security crisis brought about by the Russian invasion of Ukraine continues to buffet financial markets.