Central Banks Raise Rates Amid West Asia Conflict Fuelled Inflation Fears

Central banks across major economies have raised interest rates since February as persistent inflation and the US-Iran conflict push up energy prices, adding to concerns that price pressures could flare up again.

The ongoing war has sent oil and gas prices higher, leading to increased inflationary pressures in economies reliant on imported energy. This impact is particularly visible in Europe and Asia, where higher energy costs can quickly feed into transport, food, and household expenses.

As a result, central banks are facing a complicated policy path. With persistent inflation and rising energy prices, they must balance the need to control inflation with the risk of exacerbating economic growth.