Iran war and turbulent global bond markets add to pressure as rate decisions loom this week in major western economies

• Economics viewpoint: perilous UK economic conditions trace back to Trump

Central bankers in economies including the US, Japan and the UK will face a moment of truth this week, as surging inflation raises the prospect of higher interest rates.

Policymakers in all three countries will set rates in the next seven days against the backdrop of turbulent global bond markets.

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© Photograph: Jason Lee/Reuters

© Photograph: Jason Lee/Reuters

© Photograph: Jason Lee/Reuters

As John Healey drafts his autumn budget, the US president’s policies continue to inflate debt servicing costs

Britain is not entirely in control of its own destiny, from the rising cost of the weekly shop, to the vaulting cost of government borrowing. What is said and done in Westminster matters. But the global backdrop is making life tough, not least in the deeds and words of one man: Donald Trump.

As John Healey drafts his plan for next month’s autumn budget, the perilous economic conditions the chancellor must navigate can be traced back to the door of the US president.

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© Photograph: Manuel Balce Ceneta/AP

© Photograph: Manuel Balce Ceneta/AP

© Photograph: Manuel Balce Ceneta/AP

Crude jumps above $107 a barrel amid concerns over Middle East conflict and out-of-control government borrowing

Nervous investors across big economies have been dumping government bonds, driving up the cost of borrowing, as surging oil prices amplified fears about rising inflation.

The cost of a barrel of oil jumped 6% to above $107 on Thursday amid concerns that advances by Houthi rebels along the Red Sea coast in Yemen could choke off Saudi crude exports.

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© Photograph: YONHAP/EPA

© Photograph: YONHAP/EPA

© Photograph: YONHAP/EPA

Concerns over rising inflation, continuing war with Iran, and the US’s record national debt have shaken the market

Americans who have been grappling with the higher cost of living over the last few years now face another issue: trouble in the US bond market that could mean elevated costs are here to stay.

US government bonds – known as treasuries – are supposed to be the most stable type of investment vehicle. But investor concerns over issues including rising inflation, the continuing war with Iran, and the US’s record national debt have shaken the market and slowed demand for US treasury bonds.

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© Photograph: Lori Van Buren/Albany Times Union via Getty Images

© Photograph: Lori Van Buren/Albany Times Union via Getty Images

© Photograph: Lori Van Buren/Albany Times Union via Getty Images

Scott Bessent made announcement on Wednesday as bond yields rose to highest point since 2008 financial crisis

The US treasury moved to cut the cost of borrowing on Wednesday only to be swiftly rebuffed by the bond market.

Scott Bessent, the treasury secretary, announced the US would buy back $6bn worth of government debt – treasuries – in an effort to alleviate a selloff in the US bond market that has put pressure on interest rates.

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© Photograph: Chip Somodevilla/Getty Images

© Photograph: Chip Somodevilla/Getty Images

© Photograph: Chip Somodevilla/Getty Images

Around the world, rising bond yields reflect shifting expectations on how fast policymakers will raise interest rates.

In an interview, Italy’s hard-right leader reveals how pragmatism is reshaping her vision for Europe.

© Davide Monteleone for The New York Times

Government bond yields are hitting multi-decade highs, reflecting anxiety about debt levels, deficits and inflation. The effects will extend to mortgages, business loans and other types of credit.

© The New York Times