UK inflation hits 40-year high and other economy stories you need to read this week

The world's largest financial institutions increased their backing of companies most responsible for deforestation in 2021, a new study shared by Reuters has found.

The study, issued by the Forests & Finance Coalition of NGOs, found that finance to deforestation companies, in the agriculture, forestry and land use sectors, rose over 60% to $47 billion between 2020 and 2021.

Banks have lent $267 billion to forest-risk commodity firms since the signing of the Paris Agreement on climate change in 2015, according to the report.

"The world's financial institutions are actually increasing their lending to the very industries driving humanity to the brink," Tom Picken, director of Rainforest Action Network's Forest and Finance Campaign, said in a statement.

Non-banks are still not being properly regulated, years on from the global financial crisis, the Bank of England’s Deputy Governor Jon Cunliffe says.

He warned rising interest rates point to ‘new weak points such as emerging market funds and more stresses could materialize as global financial markets adjust to a rapid rise in interest rates’, Reuters reports.

"The areas where you might see stress are emerging markets, particularly with the strength of the dollar, and emerging market bond funds," Cunliffe told the Treasury Select Committee this week.

Cunliffe said stress tests of banks and non-banks may need to be strengthened, following what happened to markets during events like the COVID-19 pandemic.

"I think that there needs to be more attention to financial stability and macro prudential issues between authorities like the Bank of England, and the securities regulators who are responsible for those markets," Cunliffe said.

The world’s markets faced another tough week as Jamie Dimon, JP Morgan’s CEO, joined a number of high-profile voices predicting a likely global recession ‘in six to nine months’. He said that the Federal Reserve ‘waited too long and did too little’ to curb inflation, the Guardian reports.

Amazon’s Jeff Bezos also warned of hardship ahead for the economy. He wrote that the US economy was sending a signal to "batten down the hatches", in a recent social media post.

The warning comes as US inflation continues to rise with consumer prices increasing 0.4% in September, up 8.2% from year-on-year ago, according to BLS data.

The International Monetary Fund looks at how countries should respond to a strong dollar.

Oil prices gained around $1 on Thursday as investor sentiment rose on news that China is considering a cut in the duration of quarantine for inbound visitors, according to Reuters.

Elsewhere, the Japanese Yen weakened past 150 against the dollar to hit a 32-year low.

In India, consumer price-led inflation is expected to gradually decelerate, helped by a fall in commodity prices and easing food inflation.

The biggest jump in food prices since 1980 pushed UK inflation back into double digits last month, matching a 40-year high hit in July.

The National Bank of Ukraine kept its key rate unchanged at 25% on Thursday, a level it said was forecast to be maintained until the second quarter of 2024 as it grapples with high inflation fuelled by Russia's invasion.

Inflation disproportionately affects women and girls. But, civil society can help by raising awareness, campaigning on childcare reform, and supporting women in the global south.

Data from the European Commission has shown Sweden to be Europe's most innovative country. The European Union argues that innovation is vital to building a resilient and sustainable future.

The Financial Stability Board recently released its proposed recommendations to strengthen the regulation of crypto assets and so-called global stablecoins. Here's what it said.