#energy-prices

#energy-prices

The figures show the severe impact the Iran war is already having on the euro zone economy. But, like in the 1970s, stagflation could become a widespread global phenomenon characterised by high inflation, low growth, and high unemployment, heavily driven by oil price shocks.

Sterling fell by 0.5% against the dollar, dropping below $1.33, as the US currency strengthened due to a flight to safety. The dollar index increased by 0.3%.

If the price of energy continues to be elevated for the whole year, that could put a crimp on the AI boom. Because that investment is very concentrated in a number of very large firms, and the technology is still ultimately unproven in terms of how much it can deliver, there is a bit of uncertainty there in terms of where the future's going.

Services experienced the highest annual increase at 3.4%, followed by food, alcohol, and tobacco at 2.5%. Non-energy industrial goods saw a more modest increase of 0.7%. Meanwhile, energy prices fell by 3.1% over the month, which helped to temper overall inflation pressures.

This narrowly tailored, short-term measure applies only to oil already in transit and will not provide significant financial benefit to the Russian government, which derives the majority of its energy revenue from taxes assessed at the point of extraction.

The move reflects a noticeable increase in market caution as investors begin to reprice rising macroeconomic risks. According to data from The Street, around 68% of stocks in the market declined in the latest session, while only about 28% advanced. This suggests that selling pressure was not limited to a few sectors but rather spread across the broader market, reflecting a state of broad risk-off selling.

This narrowly tailored, short-term measure applies only to oil already in transit and will not provide significant financial benefit to the Russian government. Treasury Secretary Scott Bessent stated this regarding the 30-day license authorizing the sale of Russian petroleum products, emphasizing the temporary and limited nature of the sanctions easing.

Energy becoming more expensive globally and the weaker pound means Britain pays even more for those imports. Oil and most commodities are priced in dollars. A softer pound therefore magnifies the impact of rising global prices.

Oil distributors, retailers and wholesalers have been accused of taking advantage of the crisis in the Middle East to price gouge Irish consumers, farmers and businesses. Home-heating oil prices have now shot up by €500 for 1,000 litres since last week, with petrol and diesel also surging at the pumps.

For the ECB, today's German inflation data will not change the course of monetary policy. The figures confirm that at least for the time being, inflation no longer tops the list of concerns for European policymakers.