The global economy is in danger of entering a period of so-called stagflation, or high inflation and weak growth, policymakers and corporate leaders say, which could erode living standards around the world.

US Treasury secretary Janet Yellen on 18 May became the latest leader to warn of turbulence for the global economy. “Certainly the economic outlook globally is challenging and uncertain,” Yellen said in Bonn, Germany, ahead of a meeting of leaders of seven wealthy nations. “Higher food and energy prices are having stagflationary effects, namely, depressing output and spending and raising inflation all around the world.”