The world economy has been resilient in the face of high energy prices. Outside the Gulf, global GDP growth looks to have been stable in Q2, as government support, saving buffers, and the AI boom have offset much of the drag from the energy shock. Inflation has tentatively peaked in much of the world. Provided the Strait of Hormuz is re-opened soon, we expect global growth to edge up and inflation to stabilise before falling next year. However, with the blockade still in force and no guarantee that the US will accept the Oman-Iran proposal, energy supplies risk remaining lower for longer than we have been expecting. Accordingly, the risks are skewed towards higher energy prices feeding higher inflation and more interest rate hikes.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.
