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Inflation fears grip financial markets

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waterman

Written by Dan Waterman
March 3rd 2026
Huge financial market sell-off as oil & gas prices climb further..

Inflation fears grip financial markets as oil & gas prices continue to climb with the US Dollar dominating all currencies.

There is a lot going on so I will just briefly touch on multiple points today;

- 1-week ago there was just a 10% chance the ECB would raise interest rates at anytime this year, this is now at 50%.

- European stocks have suffered their biggest two-day drop since April 2025

- Energy prices have skyrocketed again today after Iran threatens to set fire to ships in the Strait of Hormuz (where a fifth of global oil & gas is routed).

- Oil prices now at highest since January 2025 with gas prices up 90% in 2-days.

- A BoE interest rate cut this month is now down to only a 20% chance

- UK bond yields have surged by 0.3%

- GBP v USD has lost 1.5% in 2-days with GBP v EUR more stable, improving by 0.3% since yesterday

As I always mention in these reports, investors play the future game and play out what could happen scenarios. A spike in energy prices will spike inflation and this may cause central banks to act and then the repercussions of those decisions ultimately put a price on everything in the future.

There will undoubtedly be an almighty pull back in all markets, but first the question of how much worse can this all get needs to be answered.