G7 Central Banks Face Pressure to Raise Rates Amid Inflation Fears

Central banks from the Group of Seven (G7) face a pivotal week as inflation risks grow, forcing them to consider raising interest rates. The Federal Reserve's decision on Wednesday will be closely watched after a higher-than-expected core inflation reading last Friday.

The US central bank is likely to raise its benchmark rate, defying President Donald Trump's wishes. This move had been building in support even before the latest figures, with three officials dissenting against the decision to hold rates steady in July and preferring a hike instead.

Bank of England policymakers may also shift towards a rate increase as soon as November due to simmering price risks. The Bank of Japan is widely predicted to raise its key rate at the end of the week after supportive data, including a significant jump in wages.