Iran conflict fuels bets on central bank rate increases
Markets expect rate hikes as the Iran conflict pushes oil above 119 dollars. Officials fear rising energy costs could trigger a new wave of inflation.
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Central banks across Europe are facing intense market pressure to raise interest rates as the escalating conflict in Iran drives up energy costs and revives fears of a new inflationary wave. On Monday, money markets significantly increased bets on rate hikes for the European Central Bank, the Swiss National Bank in Switzerland, and the Riksbank in Sweden before the end of the year. The Bank of England in the United Kingdom is also expected to follow a tightening path, though potentially later in the cycle.
