Middle East conflict already hurting the UK economy

The rises in petrol prices and mortgage rates show that the new stagflationary pressures we previously warned about due to the conflict in the Middle East have arrived. We think the Bank of England will deal with this trade-off by keeping Bank Rate at 3.75% next Thursday, but our hunch is that the rise in market interest rate expectations has gone too far.

At 3pm GMT on Thursday 19^th March we will be hosting a 20-minute online Drop-In to discuss the outlook for Bank of England, ECB and Fed policy. (Register here.)