Middle East war pushes up energy and global borrowing costs
Global energy prices and government borrowing costs have risen after the Middle East war, with oil futures above $100 a barrel and bond yields climbing toward financial crisis-era highs. Inflation picked up in August in the United States, the euro zone and the UK, driven largely by energy, and markets now price further central bank rate increases. So far growth and corporate earnings have been resilient, helped by strong ai-related spending, but higher energy and mortgage costs are squeezing households and consumer demand, raising the risk of slower growth and pressure on equity and credit markets.
Oil futures are above $100 a barrel, about 50% higher
Context
A war in the Middle East has reduced supply and pushed up energy prices. Bond yields have risen and markets expect more rate hikes. That could slow growth and lift inflation next year.
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