Charing a meeting of G7 Finance Ministers and Central Bank Governors in Washington DC on Wednesday 13th 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, 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 (PRGT) 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.
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.