Pressure is mounting on Gulf states to fight surging inflation when they meet on Wednesday by severing the links between their currencies and the US dollar, according to a report in the Times, which cited analysts. The paper said officials in Qatar and the United Arab Emirates have denied rumours of an imminent decoupling, but investors are betting on reform and are rushing to buy local currencies as investment banks issue fresh calls for revaluation.

Analysts were cited as saying, however, that Gulf states are unlikely to decouple suddenly from the dollar and predicted more measured moves towards links to a basket of currencies.

Faced with rising construction and labour costs, as well as severe recruitment problems, Gulf corporations are leading the call for currency reform, the paper said.

“Human resources are becoming scarce. Supplies are becoming scarce. De-pegging would help a great deal,” Khalil Sholy, the president of Qatar’s United Development Company was cited as saying.

Reports emerged last week that Gulf central banks were organising meetings this Wednesday, March 19, and on April 14 to discuss the possibility of depegging their currencies from the dollar.