Merryn Talks Money Markets Wrap: War, Energy and the Return of Inflation Risk
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Mar 6, 2026 They unpack how a widening Middle East war could jolt oil markets and push inflation higher. They examine energy supply shocks and fractured supply chains. They outline how constrained inputs like electricity, land and capital have dented UK productivity. They flag financial strains from higher-for-longer interest rates and the growing risk of stagflation.
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War Duration Is The Key Market Unknown
- The duration of the Middle East war is the single largest unknown driving market volatility and inflation risk.
- Merryn Somerset Webb and John Stepek stress that oil price paths — and therefore interest-rate expectations — hinge entirely on how long the conflict lasts.
Supply Fractures Make Energy A Systemic Risk
- The global economy's fractures make supply shortages central to macro risk, especially for energy-dependent nations.
- John Stepek highlights supply vulnerability exposed since COVID and how energy shocks cascade into inflation and rates.
Rationing Energy Land And Capital Explains UK Stagnation
- UK productivity weakness stems from rationing key inputs: energy, land, and capital.
- John Stepek cites Simon French's 'Ration Pack Britain' argument that regulation and policy choices have constrained supply and raised costs.