Oil prices put global interest rates back in focus

Rising oil and gas prices linked to the US-Iran war are squeezing household budgets and renewing concerns about inflation. Brent crude is around $105 a barrel, while restricted shipments through the Strait of Hormuz have added pressure to energy markets.

The European Central Bank raised its interest rate to 2.5% this week, warning that inflation would remain above its 2% target. The US Federal Reserve and Bank of England are due to make rate decisions next week, with a US increase seen as possible and the UK rate widely expected to remain at 3.75%.

Higher rates can slow spending and price growth, but they also raise borrowing costs and can discourage business investment and hiring. UK households are also facing higher winter energy bills, while inflation stands at 2.9% and is expected to rise in coming months.

Read the full story at BBC.