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Equity indices, currencies, commodities, bond markets.
Overall, based on data available through August 2026, the inflationary impact and the negative effect on activity of the current energy shock remain significantly lower than the 2022 shock. Due to renewed tensions in the conflict in Iran and, consequently, on hydrocarbon prices, inflation is moving up again, but still in a limited way for now and driven solely by energy prices. Overall, confidence surveys do not show any signs of these negative trends.
Oil and gas markets remain volatile and followed different trajectories during August. The gas market does not benefit from the buffers in place in the crude oil market. Oil prices have stabilised at a high level, widening the gap compared to the 2022 crisis. While the increase in gas prices remains lower than that seen following Russia's invasion of Ukraine, the pace of the price increase is high.
The expectation that the surge in inflation, driven by this new energy shock, would be more moderate than in 2022 (with demand being less dynamic and supply less constrained) is confirmed. However, following the Memorandum of Understanding (MoU) signed in mid-June between the United States and Iran, inflationary risk has eased but has not disappeared. This MoU had seemed to reduce the risk of a severe escalation of the conflict, but since mid-July and the resumption of hostilities, it has entered a new phase of tensions, once again driving up hydrocarbon prices
Oil and gas markets lack direction amid persistent instability in the Strait of Hormuz. While oil prices have thus far reacted similarly to the two energy shocks (2022 and 2026), the rise in gas prices remains lower than the increase seen following Russia's invasion of Ukraine.
Equity indices, currencies, commodities, bond markets: Rates took off and tech slid further, leading Europe stock to outperform.
Shocks are mounting, but growth is holding up. Although GDP figures for the Eurozone, France, Germany and the United States are due to be published on 30 July, our nowcasts indicate that growth returned to its trend rate in the second quarter. This rate is approximately 1% per annum in the Eurozone, France and Germany, and 2% per annum in the United States. In Q2, the Eurozone is expected to benefit from sustained growth in Germany, with investment plans gaining momentum, while France is expected to see a rebound in exports and residential construction after a poor start in Q1. In the United States, growth is expected to remain driven by non-residential investment and household consumption but will be held back by strong imports.
The latest economic news
Shock and resilience: These are, once again, the key words of the first half of 2026. In 2025, the global economy had already faced the US tariff shock (less severe than initially feared) and demonstrated remarkable resilience. Today, faced with the new energy shock caused by the conflict in Iran, how resilient is the global economy?
Gathered in Sintra, Portugal, from 29 June to 1st July, the members of the ECB Governing Council adopted a notably cautious stance, just three weeks after raising key interest rates. This unanimous decision was in response to the energy shock triggered by the conflict in the Middle East. Since then, energy prices have fallen sharply, and the inflation and survey data from June have shown positive trends. However, the indirect effects of the energy shock are still difficult to assess fully. We maintain our scenario of an additional ECB rate hike in September, despite the easing of inflation risks, which makes such a move less likely.
Against the backdrop of the war in the Middle East, how are the energy crisis and the rise of AI redefining the dynamics of growth, inflation and productivity? What tools do advanced and emerging economies have at their disposal to strengthen their resilience whilst capitalising on the new opportunities that are emerging? How can Europe adapt and capitalise on the changes currently underway?These were the questions addressed at the latest BNP Paribas Economic Studies conference: “The global economy in the face of shocks: between upheaval and resilience”.Alongside Isabelle Mateos y Lago, Chief Economist of the BNP Paribas Group, two panels of economists discussed the consequences of the energy crisis and the massive expansion of artificial intelligence
Following the pandemic and the war in Ukraine, the conflict in the Middle East confirms that the global economy has entered an era of repeated supply shocks. Faced with the risk of shortages and the resurgence of inflationary pressures, the resilience of advanced and emerging economies is being tested. Central banks are more vigilant. However, the crisis could also lead to certain structural transformations that the global economy – and Europe in particular – needs.
Artificial intelligence is poised to reshape societies. The countries that produce the components essential to AI and those that are investing heavily in the field – led by the United States and China – will be the big winners. This surge of investment fuels strong momentum in start-up creation and drives a profound transformation of the labour market, ushering in a new cycle of productivity growth. The impact of AI on inflation is mixed: in the short term, it creates pressure on prices due to its needs in tech components and energy; in the medium term, AI should, like any major innovation, become disinflationary.
