The International Monetary Fund has warned that a surge in oil prices caused by war in the Middle East could hobble the already ‘limping’ global economic recovery.

The president of the World Bank, Ajay Banga, said the conflict was ‘an economic shock we don’t need’.

Israel’s war with Hamas adds to turbulence on financial markets already convulsed by worries about ‘higher for longer’ interest rates.

IMF chief economist Pierre-Olivier Gourinchas said a 10 per cent rise in oil prices could lop 0.15 per cent off GDP growth next year and add 0.4 percentage points to global inflation.

He added oil prices had already gone up by about 4 per cent over the past few days.

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