The Bank of England could raise interest rates later this year if energy prices remain elevated following the conflict involving Iran, economists have warned.
Analysts say disruption to oil and gas flows through the Strait of Hormuz and wider instability in the Middle East could increase inflation and force policymakers to reconsider plans to lower borrowing costs.
Oil prices have already reacted to the tensions. Brent crude rose to around $81 per barrel, roughly 10% higher than last week, while UK natural gas prices briefly more than doubled before easing.
Research from the National Institute of Economic and...