Central banks in the US, UK and Japan are all facing pressure to raise interest rates this week as inflation surges, driven partly by an intensifying US-Iran conflict pushing oil prices above $100 a barrel. The decisions matter because they will test whether Kevin Warsh, Donald Trump's handpicked new Federal Reserve chair, can resist presidential demands for rate cuts and instead push through a rise, while also signalling how seriously policymakers in London and Tokyo are treating renewed inflationary pressures.

The Fed decides on Wednesday, with US inflation stuck at 3.4% and above target for over five years, while Trump has publicly demanded the "lowest rate of any country in the world". The Bank of England meets on Thursday and is expected to hold rates at 3.75%, though three of nine MPC members backed a rise in July and markets now expect four UK rate rises over the next year, up from three previously. The Bank of Japan announces on Friday and is widely tipped to raise its policy rate by a quarter-point to 1.25%, its highest in over 30 years, a move Treasury secretary Scott Bessent has suggested he anticipates.