Global equity markets faced significant downward pressure following reports of increased US military deployment to the Middle East. Geopolitical instability has sparked widespread investor concern, overshadowing recent economic data and driving volatility. Simultaneously, UK borrowing costs have surged to their highest levels since 2008 as Gilt yields hit multi-year peaks. Money markets are now pricing in three additional quarter-point interest rate hikes from the Bank of England this year to combat persistent inflation. The current inflationary shock remains primarily driven by volatile energy prices, specifically oil and gas. This combination of geopolitical risk and hawkish monetary expectations continues to weigh heavily on investor sentiment across major asset classes.
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