Middle East conflict risks sharp rise in oil prices, says IMF

In the UK, anxiety over the crisis after Iran's missile strike on Israel drives down UK shares

An escalating Middle East conflict risks leading to higher oil prices, a reversal of the recent fall in inflation and a puncturing of the optimistic mood in financial markets, the International Monetary Fund has warned.

The Washington-based IMF said it was closely monitoring events in the region after Iran's missile strike on Israel at the weekend and stressed the possibility that a war between the two countries could lead to higher interest rates.