Markets slide as soaring oil and gas prices fuel stagflation concerns – business live | Business

Russia appears increasingly embroiled in the conflict, and with the relentless bombing of Ukrainian cities and the human tragedy continuing, speculation is that the United States and Europe will retaliate by banning Russian energy exports. This would have a wealth effect on their economies, with supply squeezed into world markets, driving up prices for industries across the board and making the cost of living crisis all the more painful. This puts pressure on central bank policymakers, who face an increasingly difficult tightrope to follow in trying to bring inflation down by raising rates, which will make overall costs more unsustainable, potentially tipping economies in a downturn.

A barrel of Brent crude jumped 15% earlier to its highest level since 2008, hitting $139, before falling back to just over $126. This is still a very uncomfortable level for businesses and consumers who are willing to pay the price in terms of even higher transport costs.

European natural gas prices have soared year-to-date and hit new all-time highs above €240 per megawatt-hour earlier today. If Russian exports are stopped, it will leave a huge void in European energy needs, given that the country accounts for more than 30% of the region’s natural gas imports.

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