The ongoing conflict in the Middle East and its impact on energy markets raises significant uncertainty in the outlook for inflation and growth in 2026. In percentage terms, the ramp-up in oil prices is akin to the shock in 2022, but back then, oil peaked at about $130 per barrel. This week, the war will remain front and centre, with markets keeping a close eye on several central bank meetings, as the US Federal Reserve, Bank of England, and European Central Bank announce their latest policy decisions. Interest rate expectations have risen in response to the conflict, as the risk of another inflation shock emerges due to higher energy prices. While not quite enough to knock the European economy into recession, this would be a material shock to growth if replicated in 2026.

Source: Irish Examiner March 16, 2026 23:34 UTC