Oil, gas and borrowing costs surge as fears over Middle East escalate
Escalating tensions between the US and Iran have caused a sharp rise in global oil and gas prices. This surge is fueling inflation fears and driving up government bond yields, increasing borrowing costs for the UK and other nations.
Why it matters
Rising energy costs and interest rates threaten to destabilize global economies and increase the cost of living for households.
Image source, Getty Images By Theo Leggett Business correspondent Published 9 minutes ago Energy prices have been rising sharply amid signs the conflict in the Middle East will not be resolved quickly, fuelling fears that inflation could accelerate.
With the conflict between the US and Iran in the Gulf intensifying in recent days, the cost of crude oil has risen sharply. It went above $100 a barrel on Wednesday and hit $105 on Thursday.
The war has led to the effective closure of the Strait of Hormuz, preventing supplies of oil and gas from the Gulf from reaching global markets.
Worries over higher inflation have in turn helped to push bond yields in the UK to their highest level in decades.
Speaking at a Republican Party convention in Texas on Wednesday, President Trump said he did not think the fighting would end until after the US mid-term elections in November.
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