Central Banks Face Recession Risk by Raising Rates to Address Oil Price Shock, Warns Strategist
Central banks are considering raising interest rates to counter the oil price shock caused by the Middle East conflict, but a strategist warns this could lead to a global recession. Julian Howard of GAM Investments argues that the supply-side nature of the energy price shock requires extremely high interest rates, which could be recession-inducing. The European Central Bank and Bank of England have so far kept rates unchanged, but market expectations for rate hikes are growing.
Topics: central banks economic recession inflation interest rates oil price shock