Stagflation Risk: Middle East War & Energy Crisis

0:00The latest headlines, weather, and stories right here on Sydney News today. Stackflation combines economic stagnation with high inflation, creating a tough mix of slow growth, rising prices, and often higher unemployment. Experts now worry the ongoing war in the Middle East could trigger it worldwide, much like past oil shocks by disrupting global energy supplies still. Reliant on fossil fuels. Back in the 1970s, oil embargoes from groups like OPEC quadrupled crude prices after the Arab-Israeli war, slamming economies, including Australia's. This supply shocks stall production while fueling inflation, leading to recessions and job losses across multiple countries. The impact hits hard because central banks face conflicting needs, cut rates to boost growth, or raise them to fight inflation. Australia's reserve bank, for instance, struggles to balance demand with reduced supply without sparking a downturn as its governor recently noted. Policy makers are responding with ideas

1:01like the International Energy Agency's tips to cut fuel used through less driving, more remote work, and public transport. In Australia, think tanks push for cost of living aid by a windfall taxes on gas profits, free childcare, electricity rebates, and a price is tribunal too. Curve profiteering. Meanwhile, the government has set up a fuel supply task force and is exploring profit taxes to shield households aiming to fast-track renewables for long-term relief as tension simmer.