A rise in the UK interest rate later today is even more likely after yesterday's surprise jump in inflation.
Inflation rose by 10.4% in the year to February, compared with 10.1% in January.
The Bank of England is expected to increase the interest rate for an 11th consecutive time.
Analysts think a move to 4.25% from the current 4% will be the outcome of the Bank's monetary policy committee meeting.
This would have an immediate impact on many borrowers and savers.
Meanwhile, the US central bank yesterday raised its interest rate again, despite fears that the move could add to financial turmoil after a string of bank failures.
Key rate
The Federal Reserve increased its key rate by 0.25%, calling the banking system "sound and resilient".
But it also warned that fallout from the bank failures may hurt economic growth in the months ahead.
The Fed has been raising borrowing costs in a bid to stabilise prices.
But the BBC says sharp increase in interest rates since last year has led to strains in the banking system.
Two US banks - Silicon Valley Bank and Signature Bank - collapsed this month, buckling in part due to problems caused by higher interest rates.
There are concerns about the value of bonds held by banks, as rising interest rates may make those bonds less valuable.
Potential losses
Banks tend to hold large portfolios of bonds and, as a result, are sitting on significant potential losses.
Falls in the value of bonds held by banks are not necessarily a problem unless they are forced to sell them.
Authorities around the world have said they do not think the failures threaten widespread financial stability and the need to distract from efforts to bring inflation under control.
Last week, the European Central Bank raised its key interest rate by 0.5%.
Federal Reserve chairman Jerome Powell said yesterday the Fed remained focused on its inflation fight. He described Silicon Valley Bank as an "outlier" in an otherwise-strong financial system.
But he acknowledged that the recent turmoil was likely to drag on growth, with the full impact still unclear.
Sharp slowdown
Forecasts released by the bank show officials expect the economy to grow just 0.4% this year and 1.2% in 2024, a sharp slowdown from the norm - and less than officials projected in December.
The announcement from the Fed also toned down earlier statements which had said "ongoing" increases in interest rates would be needed in the months ahead.
Instead, the Fed said: "Some additional policy firming may be appropriate".
In the US, prices continue to climb faster than the 2% rate considered healthy.
Inflation jumped 6% in the 12 months to February. The cost of some items, including food and airfares, is surging even faster.
Mr Powell repeated that the Fed would not shy away from its inflation fight.
"We have to bring down inflation down to 2%," he said. "There are real costs to bringing it down to 2%, but the costs of failing are much higher."
FTSE 100
The UK's top share index, the FTSE 100, was up/down 29 points at 7,537 shortly after opening this morning, following yesterday's 30-point rise.
Brent crude futures were down 0.7% at $76.15 a barrel.
Companies reporting today
- Full-year results: Inchcape, Playtech