Great uncertainty about extent of damage. Situation looked better than 2022 when disruption assumed temporary; now moving to more adverse scenario with much sharper increases in wholesale gas prices, affecting Europe more. Economic effects beginning to look more adverse.

Fed wasn't quite as hawkish as might have been – still one cut in dot plot. Powell said 'we have no idea.' They're still hoping to look through it. For a pure supply shock, central banks should look through, but if it lasts a really long time, it drives up inflation expectations and wage growth, requiring response.

That's right. How you interpret a temporary shock depends on economic backdrop. US has sticky inflation but also softening labor market – don't want to respond hastily and damage economy.

UK labor market weakness more than US, expected to lead to sharp wage decline allowing cuts. But wage growth still too high at 3.8%. Additional inflation risk from higher energy prices a real concern for Bank of England, more than for Fed.

Equally likely. Worth thinking about risk now that infrastructure seriously damaged impacting gas prices, which drove inflation up in 2022. Not expecting ECB hike yet, but depends very much on how long this goes on.