Key points covered
- Escalation in the Middle East could increase the risk of a wider conflict.
- Higher oil prices would raise transport and production costs across the economy.
- Rising energy costs could push inflation higher globally.
- The duration and scale of the economic impact would depend on how long the conflict lasts.
- Renewed inflation could limit how far central banks are able to reduce interest rates.
- Continued money creation could add further inflationary pressure.
- Investors should expect short-term disruption and avoid reacting solely to immediate events.