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UK Energy Price Cap to Surge 13% as Geopolitical Tensions Fuel Global Inflation

The UK's household energy price cap will jump 13% this summer, marking the biggest gain since 2023. Middle East tensions are driving wholesale gas and power costs higher across global markets.

The spike reflects broader inflationary pressures rippling through major economies. U.S. import and export prices posted their steepest gains in four years, driven by oil-market volatility. South Korea's consumer inflation accelerated as elevated energy costs fed into domestic prices, reaching the fastest pace since July 2024.

The energy shock is weighing on economic sentiment. UK long-term borrowing costs hit 28-year highs as investors assessed the impact of surging power prices on growth. India's markets have faced particular pressure, with foreign capital outflows intensifying amid elevated crude costs and geopolitical uncertainty.

Energy-dependent economies face significant headwinds as wholesale markets remain volatile.