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- Ask for a crackdown: the consequences of the conflict with Iran will lead to an increase in global inflation
Ask for a crackdown: the consequences of the conflict with Iran will lead to an increase in global inflation
Global inflation will accelerate due to the conflict in the Middle East - by the end of the year it may reach 4%, experts polled by Izvestia predict. This will force the central banks of different countries to continue raising the rate. The jump in oil and electricity prices has already forced the ECB and the Bank of Japan to raise the "key" by 0.25 percentage points in June, and Australia has raised the rate to 4.35% since the beginning of the year. The market expects Europe and the United States to take another step up before the end of the year. Whether the Russian Central Bank will follow the world experience is in the Izvestia article.
How much will global inflation rise?
Oil supplies through the Strait of Hormuz and alternative routes are gradually recovering, and oil prices have almost returned to pre-conflict levels in the Middle East. The price of Brent at 17:30 on June 26 was $72.5 per barrel, and Urals — $ 58.9. In fact, this level was included in the calculations of the Russian budget for this year.
However, a full—fledged peace agreement requires successful negotiations, including on Iran's nuclear program, which can take up to 60 days. At the same time, the parties' trust in each other is low, and the risks of disruption of the deal and a new escalation are high, warned Olga Belenkaya, head of the Macroeconomic Analysis department at Finam.
Even with the signing of a peace agreement and the continued unblocking of the strait, the restoration of navigation and the previous volume of supplies of raw materials may take months. At the same time, the strategic vulnerability of Hormuz will remain, the expert emphasized. She continued: the Middle East conflict has become a supply shock to the global economy due to the blocked supply routes for oil, LNG, fertilizers and damage to the energy infrastructure of the region. The result is a sharp rise in commodity prices.
An energy shock directly causes an increase in inflation. Expensive oil leads to higher prices for fuel, transportation and electricity, which means that business costs increase. Part of this increase is being transferred to consumer prices with a delay of one to three quarters, explained Denis Astafyev, fund manager and founder of the SharesPro fintech platform. That is why the consequences of the conflict have not yet been exhausted, even though oil prices have already rolled back from their peaks.
The delayed impact of these factors could accelerate global inflation to at least 4% by the end of the year, financial advisor and founder Rodin estimated.Capital Alexey Rodin. According to the World Bank, it was 3.3% in 2025. Moreover, in January, he predicted a decrease in price growth to 2.6% this year.
The consequences of the conflict can indeed add to global inflation, but the effect will be moderate and uneven if there is no new rise in oil prices or supply disruptions, Denis Astafyev believes. In his opinion, the contribution of the energy and logistical shock to global inflation will be plus 0.2–0.5 percentage points. The result will fully manifest itself over the next three to six months. At the same time, the impact will be stronger for energy importing countries: up to 0.5—1 percentage points, especially if the national currency is weakening there, the expert said.
Global inflation has already started to rise, said Peter Arronet, chief analyst at Ingo Bank. In the USA, it increased from 3.81% to 4.25%, in Brazil — to 4.8%, in India — to 3.5%, in the Eurozone — to 3.2%, in the UK — to 2.8%, and in Germany — to 2.6%. The main reasons are similar — rising fuel prices. Disruption of the LNG supply infrastructure has become the main pro-inflationary risk for Europe.
The conflict in the Middle East will force the world Central banks to raise rates
Against the background of increased risks, central banks of different countries have already begun to tighten their rhetoric, Olga Belenkaya said. Amid rising fuel prices, the Reserve Bank of Australia raised the rate back in March, and has already raised it three times since the beginning of the year. In May, the Central Bank of Norway also took a step up by 0.25 percentage points, to 4.25%, for the first time since 2023, recalled Alexander Bakhtin, investment strategist at Garda Capital.
In June, the European Central Bank raised all three key interest rates by 0.25 percentage points, and in a release it openly wrote that this was due to the need to stabilize inflation amid the conflict in the Middle East. Now the forecasts of GDP growth in the eurozone will decrease. The rise in energy prices in Europe will definitely keep inflation above the target level for at least another year, added Oleg Abelev, head of the analytical department at the Rikom-Trust investment company.
In Japan, the fight against inflation has become the first item on the economic agenda, as rising oil and gas prices threaten to sharply increase prices in the country, said Natalia Milchakova, a leading analyst at Freedom Global. A few years ago, deflation was considered a chronic problem there, and the discount rate has been negative for a long time. At a meeting in mid-June, the Bank of Japan increased it to 1%, and by the end of 2026, the consensus of analysts expects an increase to 1.25%.
Among the world's regulators, the US Federal Reserve, the Bank of England, the Swiss National Bank, the Reserve Bank of India, Canada and the Central Bank of Turkey also held meetings in June. They all decided to keep the bet. However, it is noteworthy that no one expects policy easing anymore, the analyst stressed.
New promotions are also expected on the market. The Fed may raise the rate by the end of the year, Olga Belenkaya said. Experts do not see any chances of a decline until the middle of 2027, warned Boris Kopeikin, chief economist at the Stolypin Institute for Growth Economics.
The Bank of England may well increase its key rate soon if it sees signs of a transfer of the energy shock to wages and domestic prices, Oleg Abelev from Rikom-Trust added. The ECB will probably have to take another step up, the market admits.
Massive increases are likely to begin if the Fed and the ECB increase rates — the central banks of most countries prefer to maintain a stable difference between their "keys" and the rates of the largest economies, said Kirill Kononov, analyst at BCS World Investments. But if there will be changes, then in the coming months, most likely, they will be small — by 0.25–0.5 percentage points.
Among the most likely candidates for additional upward steps by the end of the year, first of all, energy importing countries and economies with weak currencies, Denis Astafyev specified. First of all, Japan, Australia, New Zealand and, possibly, the United Kingdom, as well as a number of emerging markets. The standard growth in such situations is 0.25 percentage points if inflation expectations do not stabilize.
However, increasing the key rate does not always work in the right direction, according to independent economist Andrei Barkhota. Especially in the context of supply shortages and business shocks. It may do little to reduce inflation, but it will greatly weaken economic growth, the expert warned.
What decision should we expect from the Russian Central Bank in July
The situation in Russia is different. Our country is an oil exporter, so this spring and early June it benefited not only from the increased prices for raw materials, but also from its shortage, Natalia Milchakova explained. Urals and lighter grades of oil were trading at a premium to Brent throughout the spring and until mid-June.
Expensive raw materials are beneficial for the Russian economy in the short term, Kirill Kononov from BCS World Investments agreed. It means an increase in export revenues, an increase in profits and economic activity. However, in the medium term, it leads to an increase in all foreign prices, and then to an increase in the price of imports.
The rising cost of oil in the world is indeed exerting inflationary pressure on the Russian economy. However, the key risks in the country are different now: a tight labor market and increased budget expenditures — this is exactly what Russia's specifics are today, Oleg Abelev explained. Despite the fact that at the last meeting on June 19, the Central Bank lowered the rate, the decision turned out to be much more cautious than the market expected. The regulator lowered the "key" by only 0.25 percentage points, to 14.25%.
In principle, nothing prevents Russia from going its own way and reducing the already high rate, Natalia Milchakova believes. The Central Bank will not return to raising the "key" this year unless unforeseen global shocks occur. Businesses are already suffering from expensive loans and limited access to financing, she stressed.
However, the expert did not rule out one or two pauses in reducing the key rate before the end of the year. Moreover, the first one is likely as early as July, since the slowdown in inflation is very unstable, and the fuel crisis at the end of the month put pressure on prices. According to Boris Kopeikin, the next meeting will probably focus on maintaining the rate or reducing it to 14%. According to Finam, by the end of the year, the regulator is likely to lower the "key" to 13.25–13.75%.
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