Middle East conflict raises Europe’s stagflation fears

Despite US President Donald Trump stating that the war in Iran could end “very soon”, economic concerns in Europe remain. The conflict has increased stagflation worries, with the region at risk due to its vulnerability to oil and gas prices. Stock markets have been volatile since the war began, and government bond yields have risen while prices have fallen. Shorter-term securities have seen more significant increases than longer-term ones, indicating that markets are beginning to price in a stagflation scenario. But just how likely is a stagflation scenario in Europe? What is the worst-case...