What you need to know about the global economy this week

Japan's services sector activity almost completely stagnated in July as a result of rising inflation and economic uncertainty.

Australian retail sales grew by 1.4% in the second quarter, once adjusted for inflation, according to data from the Australian Bureau of Statistics.

It comes as Australia's central bank raised interest rates for a fourth month running, lifting its cash rate by 50 basis points to 1.85%.

The US will have to keep interest rates "higher for longer" if inflation does not ease in response to the US Federal Reserve's recent rate rises, St Louis Federal Reserve President James Bullard said on 2 August.

Growth in India's services sector slowed sharply in July, with the S&P Global India Services Purchasing Managers' Index hitting its lowest since March, at 55.5. But the July figure is still higher than the long-term average.

New Zealand's jobless rate has held just above historic lows, while wage inflation has hit a 14-year high. This raises the prospect of more interest rate increases than expected, Reuters reports.

Pakistan's annual consumer price inflation hit a 14-year high of 24.9% in July, up from 21.3% in June. Fuel and electricity charges along with rising prices for vegetables, pulses, cooking oil, wheat flour and milk were all significant factors.

Inflation in Turkey has reached a 24-year high, with consumer prices rising by 79.6% on the year in July.

Central banks in major developed and emerging markets delivered nearly 1,200 basis points of interest rate hikes in July alone, reports Reuters.

Swiss consumer price inflation held steady at 3.4% in July, slightly less than economists had expected after it touched a 29-year high in June.

The value of German exports hit a new record in June after jumping by 4.5%, although experts cautioned that much of this might be due to rising prices.

Australia's trade surplus also hit a record high in June, reaching A$17.7 billion ($12.3 billion).

Singapore has joined countries such as South Korea and Egypt in releasing a green bond as it looks to fund the fight against climate change. It hopes to raise as much as S$2.4 billion ($1.7 billion).

Bank of America has downgraded its 2023 growth forecast for Mexico's economy to 0% from 1% amid a potential US downturn.

The Bank of England raised interest rates by the most in 27 years on 4 August, despite warning that a long recession is on its way, as it moved to tackle inflation.

The central bank's Monetary Policy Committee voted 8-1 for a half percentage point rise in Bank Rate to 1.75% - its highest level since late 2008 - from 1.25%.

Governor Andrew Bailey said all options were on the table for the BoE's next meeting in September, and beyond.

"Returning inflation to the 2% target remains our absolute priority. There are no ifs and buts about that," Bailey said at a news conference.

Household debt in the United States hit a record $16.15 trillion in the second quarter. It was largely driven by a $207 billion jump in mortgage balances, with credit card and car loan debt also rising as consumers increased borrowing in response to rapid inflation.

There was also a modest rise in delinquency rates – people running behind on payments – for all debt types. Delinquencies for credit cards and car loans are "creeping up," particularly in lower-income areas, the New York Fed's quarterly household debt report said.

There has been a steep rise in prices for more expensive items such as homes and cars over the past two-and-a-half years as demand outstripped supply. The average dollar price for new purchases of these items has risen by 36% since 2019.

"All debt types saw sizeable increases, with the exception of student loans," the regional Fed bank's researchers said. "In part, the growth in each debt type reflects increased borrowing due to higher prices."

Japan is set to raise its minimum wage at a record pace this year, the government announced on 2 August. The health ministry approved a recommendation by its sub-committee that the average minimum wage for the fiscal year ending next March should rise by 31 yen (25¢) per hour – a record 3.3% increase, taking the minimum wage to 961 yen ($7.30) per hour.

"Given the underlying inflation of over 2% and Japan's growth potential of around 1%, the pace of minimum wage hikes is reasonable, reflecting the premier's commitment to higher wages," said Yoshimasa Maruyama, Chief Market Economist at SMBC Nikko Securities.

"What's important is to drive wages higher in a sustainable manner, rather than making it a one-off move," he said.

A new research paper from the Bank of Korea, South Korea's central bank, has examined the potential impact of interest rate increases on residential property prices.

Central bank comms? Evidence on the impact of communication in times of high inflation.

A new NBER working paper explores 160 years of the racial wealth gap in the United States.

New real-time inequality statistics – again for the United States – are highlighted in this VoxEU column.