Interest rates are rising this week – should we expect a bumpy road ahead?

At the moment, interest rates are almost absurdly low, and I believe the present crop of central bankers will be judged harshly by history, writes Hamish McRae

It would be unrealistic to pretend there will be no disruption (Getty/iStock)

This will be the week of rising interest rates from the world’s central banks. The most important increase will come on Wednesday from the US Federal Reserve, and the main question there is whether it will be a half point rise or a three-quarter point increase.

On Thursday, the Bank of England is widely expected to increase its rates by a quarter per cent to 1 per cent, which would be the highest since 2009. Other central banks where increases are on the cards include Australia, the Czech Republic, Poland, Iceland and maybe Norway.

This is a global thing. The financial markets expect several more increases this year and next, with the debate really being about the speed at which rates are likely to climb and the levels they will reach.