The prospect of a new economic shock emanating from the Middle East is likely to heighten central bankers’ cautious approach to cutting interest rates, economists said in the wake of Israel’s attack on Iran.
The Federal Reserve and Bank of England are among the central banks due to meet in the coming days as Israel’s attack on Iran adds to a series of geopolitical shocks, including Donald Trump’s trade war, that are clouding the outlook for growth and inflation.
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