Energy costs drive inflation and borrowing rates
Energy prices have risen significantly, causing a substantial impact on household budgets. The price of a barrel of oil reached a five-month high at $110, and gas prices in Asia and Europe soared to their highest levels since December 2022. This increase has led to higher transportation and heating costs and put pressure on prices for food, clothing, and packaging materials, contributing to rising inflation and borrowing costs. Additionally, the war with Iran has driven diesel prices worldwide upward, with the UK and the US experiencing record levels, which has increased fuel expenses. In Britain, filling a car's tank now costs up to 40% more. The rise in energy prices has affected inflation and the real estate markets, with inflation rates and loan volumes unexpectedly increasing. Inflation has reached its highest level since October 2025, driven by the surge in gasoline and diesel prices.
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