Central banks ‘risk global recession unless they relax 2% inflation targets’

Unctad says poorer countries are being disproportionately affected by the higher interest rates in advanced countries. Photograph: John Wessels/AFP/Getty Images

Central banks risk tipping a stalling global economy into a full-blown recession unless they relax their 2% inflation targets and adopt a more pro-growth stance, the economic arm of the UN has warned.

Pointing to evidence of a looming debt crisis in poor countries, the UN said the sharp rises in interest rates from the major central banks since 2021 had increased inequality and reduced investment but proved a blunt anti-inflation weapon.