UN accuses richest countries of ‘imprudent gamble’ in inflation fight

People carry gas cylinders bought at a distribution centre in Colombo. The UN report said countries such as Sri Lanka, that are already struggling with debt distress, were taking some of the biggest hits from the latest steep interest rate rises. Photograph: Rafiq Maqbool/AP

The interest rate rises and austerity the world’s richest nations are using to fight sky-high inflation risk a painful global recession that would hurt developing countries most, the UN has warned.

In its annual trade and development report, the UN Conference on Trade and Development (Unctad) said a drive by major central banks to ramp up rates in response to soaring prices represented an “imprudent gamble” that could dangerously backfire.