India’s state election cycle kicks back into gear next month with the energy shock from the Iran conflict reverberating across the country. That raises the stakes for New Delhi: if the crisis continues, the votes risk becoming an implicit test of the Modi …
18th March 2026
Sri Lanka’s fragile external position makes it one of the countries most vulnerable to a sharp rise in energy prices, and the decision earlier this week to declare every Wednesday a public holiday for state-sector workers underlines how the crisis is …
Japan’s public finances are improving at an even faster pace than we had anticipated, supporting our long-held view that the country won’t experience a fiscal crisis anytime soon. The BoJ’s flow of funds accounts released today showed that the general …
The Gilt market has grabbed a lot of headlines since the start of the war in the Middle East, as government bond yields have surged by more in the UK than elsewhere in response to soaring oil prices. (See Chart 1.) The UK’s stock market, by contrast, has …
17th March 2026
Central banks face a classic policy dilemma when oil prices surge – inflation rises but growth might weaken. The right response depends crucially on why oil prices are rising, how persistent the shock is, and whether inflation expectations are at risk. …
There is no relief in sight for the troubled housing market, with the spike in global oil prices likely to push up mortgage rates in the coming weeks. That has led us to downgrade our forecast for house prices, which now look set to fall for the fifth …
The rise in energy prices resulting from the Iran conflict will have an adverse impact on most European economies. In the euro-zone, Germany and Italy are more exposed than France, though Germany has more scope for fiscal support. The UK is less exposed …
The Iran conflict has exposed Australia’s deep reliance on fossil fuels, reigniting debate over a green energy pivot. While the government has legislated ambitious climate targets, it has shown little inclination to provide meaningful budgetary support …
BI in wait and see mode with rupiah under pressure Bank Indonesia left its policy rate unchanged at 4.75% for a sixth consecutive meeting today and, while officials seemed sanguine about inflation risks, they are clearly concerned about the renewed …
Although the RBA’s decision to raise rates at its meeting today was made by the narrowest of margins, the split vote primarily reflected differences regarding the timing of the move rather than the need for tighter policy. With the Board clearly concerned …
While a partial unwind of earlier “excessive exuberance” may explain some of the huge swings in Korea’s equities since the Iran war began, we think the fundamentals of its earlier rally are stronger than they might seem. They could, therefore, hold it in …
Amid concerns that the ongoing energy price spike will adversely affect the inflation outlook, the RBA raised rates by 25bp at its meeting today. However, the decision was made by the narrowest of margins, raising some risks to our view that a follow-up …
Nascent manufacturing recovery underway before oil price surge The modest rise in manufacturing output in February, together with the upward revision to January’s already strong gain, keeps up the sense that a gradual factory sector recovery is underway. …
16th March 2026
This webpage has been updated with additional information since first publication. Base effects compound existing disinflationary pressure The further moderation in core inflation in February joins last month’s weak Labour Force Survey as reason to think …
Nashville has reclaimed top spot in our ranking of the attractiveness to remote workers of 52 US metros. Its continued dominance owes much to its relatively low cost of living, a factor that has underpinned the supremacy of the South in our analysis. …
Major central bank meetings this week will give investors an early sense of how monetary policymakers will respond to the war. We suspect there isn’t much good news in the offing for bonds. As we observed last week, past oil crises have been associated …
Economic growth started the year on a stronger footing China’s activity data suggest that growth accelerated at the start of the year, driven by both strong exports and a pickup in domestic demand. While China is better placed than most economies to …
With supplies of crude oil from the Gulf dwindling, local prices of petroleum products imported from the Asia-Pacific region have already risen more sharply than movements in crude oil prices would suggest. While higher prices should in principle attract …
Net lending by banks to commercial real estate recovered to $7.4bn in February, up from $4.1bn in January. But that’s still down from the average of $13.1bn seen in the final two months of 2025. Moreover, excluding farms and multifamily loans, the rise …
13th March 2026
We’re continuing to support client decision-making during the Middle East conflict with comprehensive but concise analysis and daily online briefings. All of our key analysis on this crisis can be found here . Below are some highlights from our coverage …
A weak start to the year The 4.7% m/m plunge in goods exports (see here ) in January, the 3.0% fall in manufacturing sales and the 1.0% decline in wholesale sales all suggest that GDP fell at the start of the year. The 1.1% fall in hours worked in …
All of our coverage on the Middle East conflict can be found here , but we have highlighted some key pieces below. Most SSA economies are well placed to weather higher oil prices and a stronger dollar. But the region is still vulnerable to the …
A tale of two inflation measures While the CPI measure of core inflation remained unchanged at a five-year low of 2.5% in February, we also learned this week that, in stark contrast, the Fed’s preferred PCE measure showed core inflation rising to a …
Disruption to oil production in the Middle East has turned attention to Venezuela as an alternative source of oil supply. The longer energy prices remain high, the greater the incentive for oil majors to invest in new projects. But any immediate …
All of our coverage on the Middle East conflict can be found here , but we have highlighted some key pieces below. Trump doing almost everything to lower oil prices Given that oil prices are hovering around levels last seen in 2022, policymakers have …
All of our coverage on the Middle East conflict can be found here , but we have highlighted some key pieces below. LatAm benefits from higher energy prices Latin America has a relatively limited exposure to the conflict in the Middle East. If anything, …
Cooking gas shortage causing disruption Our coverage of the Middle East conflict and the implications for the global economy and financial markets can be found on our dedicated webpage and some selected pieces are highlighted below. For India, much of …
All of our coverage on the Middle East conflict can be found here . You can watch a recording of a Drop-In where we discussed the implications for the global economy here . Fiscal support might be more limited this time We pointed out in last week’s …
Q4 GDP revised down, but Q1 looks a little brighter The weakness in GDP growth at the end of last year was more severe than initially thought but, given the government shutdown appears to have been a significant drag, we anticipate a strong rebound in …
Unemployment rate rebound another reason for Bank to delay hikes The rebound in the unemployment rate to 6.7% in February supports our view that, despite the surge in oil prices, the Bank of Canada will be reluctant to discuss a potential return to rate …
All of our coverage on the Middle East conflict can be found here . We have highlighted some key pieces below. Move has kept prices in China lower than elsewhere While much of the media attention has been on the rise in the price of crude oil, a more …
The first signs of the new stagflationary pressures that we warned about last week due to the conflict in the Middle East are starting to show. Since the end of February, petrol prices have jumped by 5%, and the surge in oil prices to £76 per barrel at …
Indonesia was already struggling to contain its budget deficit and the conflict in the Middle East will only add to the challenges, with the government planning to temper the impact on local fuel prices by boosting energy subsidies. Officials have pledged …
All of our coverage on the Middle East conflict can be found here , but we have highlighted some key pieces below. You can watch a recording of a Drop-In where we discussed the implications for the region’s economies here . The hawkish tone struck by …
All of our coverage on the Middle East conflict can be found here , but we have highlighted some key pieces below. Room for easing now severely limited Given the enormous uncertainty around the path for the war in the Middel East, we’ve set out several …
Credit growth holds steady but bank lending weakens Credit growth remained unchanged in February with a further slowdown in bank lending growth being offset by a pickup in non-bank credit. The net increase in new credit slumped in February. But that just …
The surge in global oil and gas prices that has followed the outbreak of war with Iran has inevitably drawn comparisons with the energy shock that followed Russia’s invasion of Ukraine four years ago. Back then, governments – particularly in Europe – …
This page has been updated with additional analysis since first publication. Economy flatlining even before leap in energy prices With GDP not rising at all in January, it is clear that the economy was subdued even before the leap in energy prices …
A prolonged conflict in the Middle East could hit remittance flows as worsening economic prospects in the Gulf weighed on demand for migrant workers. A collapse in remittances seems unlikely. But any drop in inflows would cause external deficits in the …
Decisive action needed to combat inflation When we published our RBA Watch on Tuesday, we put forward our view that the Bank will hike rates not only at its meeting next Tuesday, but also at the following one in May. At the time, we were very much outside …
All of our coverage on the Middle East conflict can be found here , but we have highlighted some key pieces below. Our commodity team has outlined three scenarios on how the conflict in the Middle East could affect energy prices. As it happens, PM …
The yen hasn’t fared especially well over the war so far, but we suspect that reflects some particular features of the current situation and isn’t a sign its safe-haven days are over for good. At the time of writing, the yen was closing in on 160/$, as …
All of our coverage of the macro and market implications of this conflict can be found here . Extreme volatility in front-month oil prices has captured the headlines, but there have also been large moves in the shape of the oil futures curve and in the …
12th March 2026
While the outbreak of the war in the Middle East has led to a surge in volatility across most major asset classes, there are limited signs of distress in core money markets. That may change if the war drags on and disruption to energy markets became more …
The impact of the conflict in the Middle East on energy markets and the UK economy remains highly uncertain. As things stand, we suspect the most likely scenario is one in which the conflict comes to a swift end and energy supplies normalise. In this …
Boost to energy sector GDP would follow recent broader underperformance Muted core price pressures will help offset second-round inflationary effects Bank will look to hold off on hikes ahead of CUSMA renegotiation The Bank of Canada is all but certain to …
