Oil Rebound Triggers Stagflation Fears as European Gas Prices Soar

Renewed hostilities in the Gulf have sparked concerns about stagflation, which could lead to elevated inflation alongside stagnant economic growth.

Oil prices have rebounded to $100 per barrel, with Brent crude up almost 40% in July. European gas prices are set for their biggest monthly jump since March, and government borrowing costs are at multi-year highs due to inflation angst.

Alessia Berardi, head of global macroeconomics at Amundi Investment Institute, said that stagflation risk has been present since March and 'increases the risk of stagflation for sure' with the latest developments.