G7 Central Banks Face Inflation Test as Rate Hikes Loom

Central banks across the Group of Seven face a critical week as renewed inflation pressures increase the possibility of further interest-rate hikes. The US Federal Reserve, led by Chairman Kevin Warsh, will draw the most attention after Friday's hotter-than-expected core inflation data.

The Fed is expected to raise interest rates, potentially going against the preferences of US President Donald Trump. This would mark the first increase in three years.

The Bank of England is not expected to raise rates on Thursday, but the possibility of a policy shift later this year remains open. Three officials backed an increase at the central bank's late-July meeting, and persistent price pressures could strengthen the case for a hike as early as November.

Investors will closely examine the tone of the BOE's latest decision for signs of how policymakers are responding to renewed inflation risks.