The Iran war presents a ‘guns and butter’ nightmare for investors
Conflict will intensify the mounting global debt and inflation risks
Conflict will intensify the mounting global debt and inflation risks

Bank sees risks of surge in government borrowing costs and of hit to ‘rich’ asset prices

Sometimes crises do not blow over as investors might hope

Wave of inflation will persist as higher fuel prices feed through into businesses

After sharp market sell-off, debt investors shift focus from inflation fears to likely damage to economies

Tehran has a strong incentive to keep the conflict going

The world is a mess but markets seem to be shrugging worries over the fallout of the Iran war