All of our coverage of the implications of the conflict in the Middle East can be found here . Growing optimism that the conflict in the Middle East will be severe but short-lived has been accompanied over the past 24 hours by some retreat in the price of …
10th March 2026
The shock from the conflict in the Middle East has only had a modest impact on government borrowing costs in Africa, reflecting a marked improvement in sovereign risk profiles in the last few years. While most economies should be able to weather higher …
This Update takes three scenarios for how the conflict in the Middle East could play out and assesses the potential impact on the Gulf economies. In all cases, these economies would probably record negative growth this year. A short-lived conflict will …
Investors will welcome Chile’s new right-wing President José Antonio Kast – who will be sworn into office on Wednesday – but we doubt that he’ll be able to reinvigorate the copper sector and carry out his ambitious public spending cuts as quickly as he …
Sales activity weak but on the mend The surprise rebound in existing home sales in February increases our confidence that January’s weakness was largely weather-related and that resale activity will pick up again in the Spring as more normal weather …
Events in the Middle East mean that China will have to stomach a higher import bill. But China’s economy is not especially dependent on oil and natural gas. And the country has large reserves that it can deploy to dampen the pass-through to domestic …
Providing the conflict in Iran is short-lived, the impact on euro-zone commercial property values is likely to be small. However, a more prolonged conflict would weigh on property demand, especially for retail and energy-intensive industrial, while …
Asian economies vary in how dependent they are on LNG from the Gulf – for China and Japan, dependence is low, while Pakistan, Taiwan and Korea have much higher exposure. Low domestic inventories leave Pakistan and Taiwan particularly exposed now that …
Modest pick-up sets scene for solid growth in 2026 South Africa’s economy expanded by 0.4% q/q in the final quarter, a modest pick-up from the revised 0.3% q/q growth recorded in Q3, helped by stronger consumer spending. While the conflict in the Middle …
Proposals by Polish policymakers to use valuation gains from the central bank’s gold reserves to finance defence spending highlight the growing strain on the public finances from the large budget deficit. The proposal also points towards a desire to …
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 …
9th March 2026
Uncertainty around the duration of the conflict in the Middle East is keeping energy prices near multi-year highs and threatening expectations that the Bank of England will continue cutting rates this year. But how far has the spike in energy prices …
Above trend-growth and above-target inflation cement case for policy tightening Iran conflict will only aggravate near-term price pressures Although uncertainty abounds, we expect rates to peak at 4.35% We expect the Reserve Bank of Australia to raise …
Soaring semiconductor prices pushing up trade values Both exports and imports started the year much stronger than expected. While the recent pace of gains is unlikely to be sustained, exports are likely to remain robust given the recent decline in US …
Pakistan is one of the countries most threatened by the global energy shock because of its dependence on LNG from the Gulf, a recent history of very high inflation and balance of payments weaknesses. Its central bank today left its policy rate unchanged. …
All of our coverage of the macro and market implications of this conflict can be found here . This Update introduces our framework for estimating the scale of disruption to energy flows from events in the Middle East as well as three scenarios about how …
Energy price spike takes away Banxico’s room to cut in March The further rise in Mexican inflation to 4.0% y/y in January, combined with the surge in oil prices, pretty much rule out the chance of a 25bp cut at Banxico’s next meeting on 26 th March. The …
The Iran conflict has quickly escalated into a regional conflagration, generating significant uncertainty for economic outlooks across the Middle East. In this special briefing, on Tuesday 10th March , our economics team discussed the near-term economic …
Energy price spike adds to the headwinds for German industry The falls in German industrial production in January and December erased most of the recovery seen in the previous months and left output close to its post-pandemic low. With the current spike …
All of our coverage of the macro and market implications of this conflict can be found here . With the war continuing to escalate, this edition of the Capital Daily takes stock of how markets have fared so far and provides some thoughts on what might – …
The surge in energy prices will prompt the RBA to hike rates by another 25bp at its meeting next week and increases the chances that the RBNZ will start tightening policy before the end of the year. The surge in the crude oil price to a four-year high of …
Oil price surge will lift inflation CPI inflation recovered last month, thanks to an easing of oil price deflation and volatility in food and tourism prices around Lunar New Year. Tensions in the Middle East will push inflation higher for as long as …
Wage growth going strong, but Iran conflict muddies the outlook The strength in wage growth at the start of the year, combined with promising signs for upcoming spring wage negotiations, should put the Bank of Japan in a good position to resume its …
8th March 2026
All of our work on the macro and market implications of the conflict in the Middle East can be found on our dedicated page here . For Sub-Saharan Africa, the main channel through which the region will be impacted by events in the Middle East is via swings …
6th March 2026
Surge in oil prices negative for real GDP growth As a modest net energy exporter, the US is better positioned than most to handle the negative global supply shock unfolding due to conflict in the Middle East. That said, it is not completely immune. While …
Cracks in the US labour market have sparked a risk-off mood in markets, with Treasuries rallying and the S&P 500 sinking to its lows of the year. That said, the latter has been remarkably resilient over recent weeks, and we expect that to continue. The US …
…but external imbala nces to persist We took a look at what the various reports delivered at China’s National People’s Congress (NPC) tell us about the government’s plans and priorities for this year in a detailed report yesterday, and discussed our key …
At the time of writing, conflict in the Middle East has boosted the price of WTI to almost $90 per barrel, from $67 last Friday. There is a huge amount of uncertainty about how long higher oil prices might be sustained (see our dedicated page on the …
Conflict in the Middle East, a surge in oil and gas prices, and a surprise drop in US payrolls – it’s been a turbulent week for the global economy. In the latest episode of The Weekly Briefing, Capital Economics Group Chief Economist Neil Shearing joins …
The increase in energy costs brought about by the conflict in Iran could hit commercial property returns either through squeezed occupier margins and therefore weaker property demand and rent growth, and/or higher interest rates, which would put upward …
We're hosting a Drop-in next Wednesday, 11th March, at 3pm GMT/11am ET to discuss Brazil's monetary easing cycle and how events in the Middle East and the approach of October’s general election could influence it. Register here . We covered the …
Just as the economy was showing signs of improving and inflation was showing signs of easing, the conflict in the Middle East has created new stagflationary pressures. Depending on the severity and length of the disruption to global energy markets, the …
Labour market relapse Even allowing for the strikes by 31,000 Kaiser Permanente health care workers in California and Hawaii and 15,000 nurses in NYC, the 92,000 decline in payroll employment in February, combined with the 69,000 downward revision to the …
Consumption on track for a soft first quarter The breakdown of January retail sales raises some doubts about whether the weakness was primarily due to the harsh winter weather, with sales of building material & garden equipment unexpectedly doing well. …
We gave an initial assessment of the implications for the euro-zone of the war in the Middle East and resulting spike in energy prices here . In this Weekly we delve deeper into the implications for monetary and fiscal policy. Starting with monetary …
Oil prices had already risen this year in anticipation of conflict in the Middle East. But the further leg up in prices since the start of the airstrikes on Iran means that the price of Brent crude has now increased by ~45% this year to date – the second …
The war in the Middle East raises a broad set of macro and market questions. All of our analysis is collected on this page , and our summary views on some of the most pressing issues are outlined below: The economic consequences of the conflict will …
Data published this morning showed that the euro-zone economy grew at a decent pace in Q4 last year. If the recent increase in energy prices is sustained, it will be a small drag on growth but not enough to tip the economy into recession and we would …
The conflict in the Middle East poses significant challenges for Asian economies, given that most are net energy importers. Higher oil and gas prices act as a terms-of-trade shock, transferring income from importers to exporters. For most Asian economies, …
All of our work on the macro and market implications of the conflict in the Middle East can be found on our dedicated page here . Within Emerging Europe, the impact varies widely across the region. Russia is a clear beneficiary from the rise in energy …
How much of a threat do surging energy prices pose to the global economic outlook? How high could oil and gas prices rise? What scenarios should investors consider when assessing the potential impact of this conflict? Our Chief Economist team hosted this …
How will the surge in energy prices affect Latin American economies – and how might the region’s central banks respond? Our Latin America team hoste this special briefing on the regional economic spillovers from the Iran …
Fertiliser prices and remittances are factors too Our coverage of the events in the Middle East and their implications for the global economy and financial markets can be found on our dedicated webpage . We have also held a series of online briefings for …
We’re hosting an in-person property roundtable event at our London office on 18 th March to discuss the housing and commercial property winners and losers. (Register here .) This page has been updated with additional analysis since first publication. …
Inflation in Korea was muted again last month, but it would rise sharply in the event of a prolonged conflict in the Middle East that led to a sustained increase in global energy prices. Against such a backdrop, the Bank of Korea would be unlikely to …
Shock likely to be stagflationary The impact of the conflict in Iran and the concomitant rise in energy prices on the Australian economy is not clear-cut. As a net energy exporter, there are clear upsides for the country’s external accounts. Indeed, …
Japan quite insulated, but trading partners less so BoJ Governor Ueda cautioned this week that the conflict in the Middle East could affect Japan’s economy significantly, including by worsening the terms of trade and by pushing up inflation expectations …
China’s government has set some low-key targets for 2026 at the National People’s Congress. The official growth target has been reduced, fiscal policy will be looser, but only a touch, and monetary easing will be incremental too. Perhaps more significant …
5th March 2026
We’ve refreshed our scenarios for what the Middle East conflict could mean for CPI inflation and also fleshed out what the leap in energy prices could mean for petrol prices, utility prices and interest rates. On Monday we published three scenarios of …
