The conflict in Iran has had a profound impact on the global economy, sending energy prices soaring.
In the UK, signs of the inflationary impact of the shock have already emerged, raising important questions about how it may propagate over time
In this speech, Megan outlines the price- and wage- setting channels through which energy shocks can feed into broader, more persistent inflation dynamics. She compares the current episode with recent previous shocks and draws lessons for assessing the extent of second-round effects and the appropriate monetary policy strategy