Rate Hikes Loom as Oil Prices Soar Above $100 Per Barrel

Three of the world's most influential central banks - the Federal Reserve, Bank of England, and Bank of Japan - are set to make pivotal rate decisions within a single week. The Fed kicks off on September 16, followed by the Bank of England on September 17 and the Bank of Japan on September 18.

The backdrop for these decisions is an energy crisis sparked by the US-Iran conflict, causing oil prices to surge above $100 per barrel. Brent crude has climbed to $108 per barrel, pushing up consumer price data across major economies.

The Federal Reserve is expected to raise rates by 25 basis points on September 16, marking its first hike since pandemic-era easing began. Ten-year US Treasury yields are nearing 5%, a level not seen in nearly two decades.

The Bank of England faces a balancing act, with internal disagreement over whether to start hiking again. Ten-year gilt yields have approached 5.4%, the highest in decades, and inflation is expected to rise above 3% later this year.