Central banks confront spectre of inflation as Iran war escalates

Strikes on Iran and Qatar's natural gas production facilities have driven energy prices higher, creating fresh headwinds for central banks already grappling with inflation. The escalating conflict in the region has injected significant uncertainty into the global economic outlook at a time when monetary policymakers were beginning to stabilize price pressures. Central bankers face a difficult calculus: tighten policy to combat potential energy-driven inflation, or hold steady and risk being blindsided by sustained price spikes. The energy shock threatens to complicate rate decisions across major economies and could undermine recent progress in bringing inflation closer to target levels. In separate news, France has begun construction on a new nuclear-powered aircraft carrier, marking a significant investment in the country's naval capabilities.