G-8 Says Economy Faces `Headwinds,' Oil a Threat

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(Update3)

June 14 (Bloomberg) -- Finance ministers from the Group of Eight nations singled out spiraling food and fuel prices as their chief concern in warning "headwinds" dog the global economy.

"The world economy continues to face uncertainty and downside risks persist, "the officials said in a statement after meeting today in Osaka, Japan. "Elevated commodity prices, especially of oil and food, pose a serious challenge."

Inflation is accelerating after the price of oil reached an unprecedented $139.12 a barrel last week and food costs from rice to soybeans set records this year. Central banks are already shifting toward tighter monetary policy even as expansion fades.

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The International Monetary Fund predicts the fastest inflation in advanced economies since 1995 this year even as they grow at the slowest pace in seven years. Rising prices threaten to damp growth further by sapping household budgets and boosting production costs. They have also sparked protests from Malaysia to Spain.

Bloomberg

It seems there is a creeping realization that the 'growth model' is failing when businesses/shareholders are the sole benefactors at the expense of labor/workforce/consumer households.