G7 finance ministers to discuss soaring global inflation

US Federal Reserve chairman Jerome Powell is under pressure to tighten monetary policy.

The Group of Seven finance ministers will convene virtually on Monday to discuss the recent surge in inflation, according to sources.

The talks will come against the backdrop of supply-chain snarls that have hampered the world economy, and ministers will also discuss healthcare.

The meeting shows how, two years into the pandemic, the focus of global economic co-ordination has shifted from protecting jobs to finding solutions to contain inflationary pressures that threaten to squeeze income.

Less clear, however, is any concrete action that could fix the problem without derailing the economic recovery from lockdowns.

News of the planned talks came shortly after US consumer prices rose at the fastest annual pace in nearly 40 years, increasing pressure on the Federal Reserve to tighten monetary policy.

Inflation in the eurozone and the UK is also surging, driven by energy prices, labour shortages and the fraying of global supply-chains.

Economists this week suggested Irish inflation – which hit a 20-year high in November – will remain high throughout 2022 and beyond.

While the 5.3% inflation rate seen last month is expected to be close to peak, persistent elements like upward wage pressures are likely to keep prices elevated here until 2024.

- Bloomberg and Irish Examiner