Oil and gas prices surged and expectations of European interest rate rises grew after the US carried out a third night of military strikes against Iran, according to the Guardian.
Key facts
- Brent crude rose by as much as 4.6% to $87.08 a barrel on Tuesday.
- It marked the highest oil price in just over a month.
- The move followed a third night of US military strikes against Iran.
- Analysts priced in two quarter-point UK rate rises by the end of the year.
- Stock markets fell in response.
Oil and gas prices have jumped and expectations of interest rate rises in Europe have increased after the United States carried out a third night of military strikes against Iran, according to the Guardian.
Brent crude, the international benchmark for oil prices, rose by as much as 4.6% to $87.08 a barrel on Tuesday. The Guardian reported this was its highest level in just over a month.
The escalation in tensions between the US and Iran has rippled through financial markets. Stock markets fell as investors reacted to the heightened geopolitical uncertainty and its potential economic consequences.
Analysts priced in two quarter-point UK interest rate rises by the end of the year, the Guardian reported, reflecting concern that higher energy costs could feed into wider inflation.
The developments link a military flashpoint directly to the cost of borrowing and the price of energy, underscoring how quickly geopolitical events can influence markets across Europe.
Why it matters
Higher oil prices tend to push up the cost of fuel and goods, feeding inflation that central banks may respond to with interest rate rises. For households and businesses, that can mean more expensive energy and higher borrowing costs.
Frequently asked questions
How much did oil prices rise?
According to the Guardian, Brent crude rose by as much as 4.6% to $87.08 a barrel on Tuesday, its highest level in just over a month.
Why are interest rate rises now more likely?
The Guardian reported that expectations of rate rises in Europe increased after the US strikes, with analysts pricing in two quarter-point UK rate rises by the end of the year.
What triggered the market moves?
The moves followed the US carrying out a third night of military strikes against Iran, according to the Guardian.