Market participants at a Bank of England meeting debated energy price trajectories and asset class reactions amid geopolitical tensions.
Market participants at a Bank of England meeting on 7 May 2026 discussed the impact of the Middle East conflict on energy prices. Some attendees suggested prices could return to pre-conflict levels if the situation resolves, while others warned of sustained higher prices due to infrastructure damage and restocking needs. Demand risks were also noted if prices spike sharply.
Equity markets have recovered to or exceeded pre-conflict levels, driven by AI-related sentiment and strong corporate earnings. In contrast, global rates markets and central bank policy expectations continued to react dynamically to energy developments. The meeting also highlighted the unusual positive correlation between equities and fixed income during recent volatility episodes.
Currency markets showed relatively muted reactions to the conflict compared to other asset classes, according to participants.