The conflict in the Gulf has pushed global energy prices higher, leading many forecasters, including Fathom, to revise their assessment of the UK economic outlook. In our new central scenario, wholesale energy prices are nearing their peak, which is enough to keep inflation close to 3% for much of this year. As the nature of this shock differs significantly from that experienced in the aftermath of the pandemic, our central scenario does not anticipate significant second-round effects on wages and