G7 Finance Ministers agree to work together to address global supply chain pressures
The Chancellor has welcomed an agreement from G7 Finance Ministers to work together to monitor supply chain pressures as the global economy rebounds from the pandemic.
- During a meeting hosted by Chancellor Rishi Sunak in Washington DC, G7 Finance Ministers and Central Bank Governors have agreed to work together to monitor global supply chain pressures.
- Rishi Sunak also announced that the UK will commit over £1 billion worth of Special Drawing Rights to support vulnerable countries, and gives its backing to a new IMF Trust to help developing countries support green and sustainable economies.
- G7 Finance Ministers and Central Bank Governors also launch a report setting out public policy principles for issuing central bank digital currencies, a digital version of money that if introduced could be used alongside physical notes and coins.
Charing a meeting of G7 Finance Ministers and Central Bank Governors in Washington DC on Wednesday (13 October), Rishi Sunak stressed the importance of global co-operation to ensure that supply chains are more resilient as the world emerges from the pandemic.
This builds on action being taken at home to ease the supply chain issues through temporary visas and support for businesses as they transition towards a high-skill, high-wage economy through skills bootcamps and the Government’s 130% super-deduction for capital investment.
Following the meeting, Chancellor Rishi Sunak said:
Supply chain issues are being felt globally – and finance leaders from around the globe must collaborate to address our shared challenges.
Today we have collectively agreed to work closely over the coming months – and together we will build a strong and resilient recovery.
Support for vulnerable countries
During the meeting on Wednesday (13 October), the Chancellor also announced that the UK is pledging an additional loan of over £1bn worth of Special Drawing Rights (SDRs) to the IMF’s Poverty Reduction and Growth Trust (PGRT) and called on other countries to do the same. The PGRT provides zero interest loans to vulnerable countries who need financial support.
Weeks ahead of the COP26 conference in Glasgow, the UK has also given its backing to the IMF’s proposed Resilience and Sustainability Trust and called on global counterparts to do the same. This trust would redirect SDR reserves to low-income and vulnerable middle-income countries to help them address health and climate risks and support green and sustainable economic growth.
Central Bank Digital Currencies
Under the leadership of the UK, G7 Finance Ministers and Central Bank Governors also launched a set of public policy principles for retail Central Bank Digital Currencies (CBDCs), which if introduced could be a digital form of central bank money that would be used alongside physical notes and coins. This report will help support and inform exploration of CBDCs and provides an important contribution to the global policy conversation.
Today the G7 also agreed, for the first time, to work together to consider how best to coordinate efforts on the pricing of carbon to mitigate emissions, and to explore international solutions to prevent carbon leakage, helping us deliver the transformational change required by the Paris Agreement.
- Detail about the Poverty Reduction and Growth Trust can be found online.
- The G7 agreed Central Bank Digital Currencies report and statement can be found online.
- While no G7 authority has yet chosen to issue a CBDC, these principles will help in designing and potentially delivering a CBDC that would be fit for the future.
- The Special Drawing Right (SDR) is an international reserve asset created by the IMF to supplement other reserve assets of member countries.
- The UK has this week committed to channel around 20% of its new allocation of Special Drawing Rights at a value of around £4bn, out of which the UK will loan 1bn Special Drawing Rights to the Poverty Reduction and Growth Trust.
- These loans will be provided at a concessional interest rate, which is also expected to provide the equivalent of a further SDR 100m in implicit grant resources.
- Carbon leakage is the displacement of production, and associated greenhouse gas emissions, in ways that would not have happened if the pricing (or regulation) of emissions across jurisdictions was implemented in an equivalent way.
- The G7 will work together to better understand the macroeconomic consequences of the different possible paths to net zero.
Latest News from
UK and Scottish governments agree first stage of the Fiscal Framework Review15/10/2021 14:25:00
The UK Government and Scottish Government yesterday (14 October 2021) agreed in principle the scope of the independent report that will inform the subsequent review of the Scottish Government’s Fiscal Framework.
New capital raising review to boost UK companies and markets13/10/2021 11:20:00
A new review to boost companies listed on UK stock markets by giving them more options when raising capital was launched yesterday (12 October 2021).
Chancellor hails global cooperation as landmark tax reforms aimed for 202311/10/2021 15:20:00
The Chancellor has hailed global cooperation after 136 countries agreed a new system ensuring large multi-nationals pay the right tax in the right places.
Quarter of million left furlough in August as redundancies hit seven-year low07/10/2021 15:20:00
More than a quarter of a million workers left the furlough scheme in August – an 85% reduction since its peak, according to new statistics published today.
Government expands opportunities in Darlington to help level up06/10/2021 14:20:00
The Government will this week step up a recruitment drive for roles at the new economic campus in Darlington– as it continues to take action to level up the UK.
UK Government supports UK film and TV on global stage06/10/2021 12:12:00
UK Global Screen Fund makes 18 further awards totalling almost £1 million to support independent UK film and screen content to achieve international success.
£500 million Plan for Jobs Expansion05/10/2021 13:20:00
Hundreds of thousands of people to be supported as part of the more than £500 million expansion of the government's Plan for Jobs.
Chancellor visits Yorkshire to see super-deduction in action as £400 billion Plan for Jobs enters next stage01/10/2021 15:20:00
The Chancellor has today praised Yorkshire workers’ resilience during a visit to Legal & General’s modular housing factory in Selby to mark the next phase of the Government’s £400 billion Plan for Jobs.