NEW YORK: As America's central bank takes measures to curb increasing inflation, the global financial markets are prepared for the largest jump in US interest rates in nearly 30 years, as per reports.

The Federal Reserve is anticipated to raise the official cost of borrowing by 0.75 percentage points for the first time since 1994, following days of frantic investor speculation and signs of mounting central bank nervousness.

The Fed meeting will be preceded by a European Central Bank (ECB) emergency meeting to discuss Italy, Spain, Portugal, and Greece's plunging bond prices.

Following a 40-year high in UK inflation, the Bank of England is anticipated to hike interest rates on Thursday. Despite some speculation that the rate might climb by 0.5 percentage points, the City expects a 0.25 percentage point hike to 1.25 percent.

The Fed's chairman, Jerome Powell, had previously ruled out a 0.75 percent hike, but after higher-than-expected US inflation was disclosed last week, the central bank looks to have changed its mind, the report adds.

The news that the US cost of living index had risen to 8.6%, the highest level in four decades, sparked a major sell-off in bonds and stock prices, as investors feared that action to address excessive inflation would lead to recession.

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