The conflict in the Middle East has resulted in a substantial negative supply shock to the global economy. This has triggered significant market reactions, including large and volatile upward moves in global energy prices and government bond yields. The financial system has been resilient so far. However, the shock will weigh on growth, increase inflation and tighten financial conditions. This is likely to interact with vulnerabilities previously identified by the FPC in sovereign debt markets, risky asset valuations and risky credit markets, notably in private credit. Adverse impacts on the global macroeconomy ... (full story)