The European Central Bank raised rates to 2.5 per cent, with President Christine Lagarde warning inflation will be "longer-lasting than we anticipated". On the other side of the Atlantic, oil prices rose to $109 per barrel and the 10-year Treasury yield hit 4.95 per cent, pushing the futures market to a 70 per cent chance the Fed hikes next week. Goldman Sachs raised year-end forecasts by $5 to $85 for Brent and $80 for WTI, citing "significant upside risk".

Jason Bordoff at Columbia University says buffers such as inventory drawdowns and low Chinese imports are not perpetual, while Hamad Hussain at Capital Economics estimates ship-to-ship transfers let as much as 12mn barrels a day slip through the Strait of Hormuz. Refinery capacity is tight, with crack spreads at fresh highs, driving petrol and diesel prices up ahead of the US midterm elections.

Fed chair Kevin Warsh argued at Jackson Hole that wage growth is not a reliable inflation indicator, a view supported by historical data. Stocks have gone sideways for four months as markets weigh all the excitement.