26/03/2026
The Compounding Effect of Rising Oil Prices
Notwithstanding the obvious inflationary factors pushing prices up in almost every industry, there is a coupling with rising interest rates because of rising prices causing inflation (not consumer over-spending that would ordinarily be the cause of interest rates rising). This in turn gives us a classic case for stagflation, where industries are challenged with economic pressure and GDP in turn is constricted, yet inflation continues to rise.
This is one of the most difficult situations for any government to work with, as the usual monetary policy and fiscal policy cannot solve a lack of GDP or reduce inflation easily. The outcome could very well be an extended recession.
Markets are, of course, reading this in share prices and now more than every is a good time to talk to your Financial Planner.
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