Fresh attacks in the Middle East have pushed oil prices higher this morning, raising the prospect of rate hikes as central bank rate setters prepare to meet this week.
Brent crude is trading 3.3 per cent higher at around $108 a barrel, after surging 8.6 per cent to close last week at $104.61.
Rising energy prices 'pose a serious headache' for the Bank of England, which meets this week, economists warn.
The sharp rise in oil overnight follows new strikes on Saudi Arabian and Iranian ships in the Gulf, in addition to the shutdown of Saudi Arabia's East-West oil pipeline.
The closure of the route, which helps Saudi Arabia avoid the Strait of Hormuz and redirect its exports, threatens up to 4 per cent of the world's oil supply.
