G-7 Central Banks to Hike Rates Amid Inflation Risks Escalate

Central banks across the G-7 are under pressure to raise interest rates as inflation risks escalate, and this week's key decisions may reshape the global monetary policy landscape.

The Federal Reserve is set to make its move first on September 16, followed by the Bank of England and the Bank of Japan. The US central bank faces a pivotal decision after core inflation rose higher than expected on September 11, stoking investor bets that Fed Chairman Kevin Warsh will raise benchmark rates.

While a Bank of England rate increase is not anticipated for this week, officials have hinted at shifting towards a hike as soon as November. The Bank of Japan is widely predicted to raise its key rate by the end of the week after supportive data, including the nation's biggest jump in wages in nearly three decades.

The Middle East conflict and rising oil prices have heightened price pressures globally, leading policymakers to tighten their stance. European Central Bank officials tightened on September 10, marking the second such move since the Iran conflict erupted, while the Bank of Canada is also moving towards a hawkish policy stance.