Stocks to edge up as Trump draws ceasefire doubt

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Markets are continuing to digest the ever-changing narrative coming out of the conflict in the Middle East but even as hopes of a peace deal rise, the economic overhang still threatens to send shocks across the country.

In a speech by Kristalina Georgieva, the IMF’s managing director, global policymakers were warned that trade disruption across the Middle East over the last month would lead to lower growth and higher inflation.

The impact of the war was also predicted to be uneven between different countries depending on levels of energy imports and their proximity to the war, according to the world’s foremost economic organisation.

Georgieva’s address on Thursday morning underlined the consequences of what one month of the US and Israel’s war with Iran, and the subsequent hold-up in trading flows across the Strait of Hormuz, would mean for the world economy. 

She warned the most severe fuel disruptions will come for islands in the Pacific Ocean, with the ripple effects then spreading around the world. 

She also said that 45m more people would suffer from food insecurity while there were “warning lights flashing red” for fuel shortages in several countries. 

Inflation expectations could also “break anchor and ignite a costly inflation process”, though Georgieva said long-run confidence in price growth among households and businesses presented “very good and very important” readings. 

Here’s a few of our top headlines for this morning: