Increase in cost of crude could drive inflation up and force central banks to keep interest rates high

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A serious escalation of tensions in the Middle East would push the price of oil above $100 (£80) a barrel and reverse the recent downward trend in global inflation, the World Bank has said.

The Washington-based institution said the recent fall in commodity prices had been levelling off even before the recent missile strikes by Iran and Israel – making interest rate decisions for central banks tougher.

Dissidents and broadcasters feeling unsafe after stabbing of Pouria Zeraati in London call for ‘deterrent signal’

A former BBC journalist has said the UK government will “pay a heavy price” for its lack of action against the Iranian regime, which could lead to more “threats” and “operations” in Britain, after the stabbing of an Iranian journalist in London.

Sima Sabet, a former journalist at the BBC World Service and the dissident channel Iran International, said there would be more transnational repression unless the government issued a “deterrent signal” to the Iranian regime.

Tit-for-tat attacks present Sunni monarchies with complicated choices over region’s future

Iran’s missile and drone attack on Israel had, by the end of this week, become one of the most interpreted events in recent modern history. Then, in the early hours of Friday, came Israel’s reported riposte . As in June 1914, when Archduke Franz Ferdinand and his wife were assassinated in a moment which ultimately led to the first world war, these shots were heard around the world, even if few can agree conclusively on what they portend.

By one de minimis account, Tehran was merely sending a performative warning shot with its attack last Saturday, almost taking its ballistic missiles out for a weekend test drive. The maximalist version is that this was a state-on-state assault designed to change the rules of the Middle East. By swarming Israel with so many projectiles, such an assessment goes, Iran was prepared to risk turning Israel into a mini-Dresden of 1945 and was only thwarted by Israeli strategic defences and, crucially, the extraordinary cooperation between the US, Israel and Sunni Gulf allies.

Tit-for-tat attacks have breached taboo of direct strikes on each other’s territory but Tehran has no ‘immediate’ plans to retaliate

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World leaders urged calm on Friday after Israel conducted a pre-dawn drone sortie over Iran following a cycle of tit-for-tat attacks that crossed an important red line that has for decades held the Middle East back from a major regional conflict.

There were tentative hopes late on Friday that the apparent strike attempt against an airbase near the city of Isfahan was sufficiently limited to fend off the threat of a bigger Iranian response and an uncontrolled spiral of violence between a nuclear power and a state with the capacity to develop nuclear weapons quickly.

Both Iran and Israel are calibrating their responses. That does not mean the region should breathe easy

The danger facing the Middle East is not from wild or impulsive action, but from the considered decisions of men who believe they know what they are doing and how their opponents will respond. Their confidence is not reassuring when their judgment has previously fallen short.

On Friday, Iran was quick to play down the overnight strike by Israel, suggesting that it was unclear who was responsible and indicating that there would not be immediate retaliation. Israel had chosen to launch a limited attack on Isfahan , the home of a major nuclear site, without targeting the facility itself. The aim was apparently to send a message about what it could do, not to cause significant damage now. If this is the extent of its response to Iran’s weekend attack, it is far from the worst that many had predicted. The optimistic view is that both sides feel, or at least feel they can claim, that they have restored deterrence to some degree. A moment of respite is welcome. But relief would be premature.

Israeli prime minister’s main concern is his political survival but a multi-front war is still a strong possibility

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In the aftermath of Iran’s unprecedented salvo of missiles and drones fired directly at Israel at the weekend, Benny Gantz, a centrist member of the Israeli war cabinet, said the country would respond “in the place, time and manner it chooses”.

That turned out to be explosions in the central Iranian city of Isfahan on Friday morning. Although no Israeli official has claimed responsibility for what seem to have been drone strikes on a military installation , Tehran, which had launched its attack after an airstrike on its consulate in Damascus, has downplayed the incident. The limited response may have, for now, staved off the threat of regional war.

Israel launched a limited attack on Iranian soil on Friday morning, in the latest tit-for-tat between the two countries

All our coverage of the Israel-Gaza war

Israel launched an attack on Iranian soil on Friday , in a tit-for-tat battle between the two foes, days after Iran launched an unprecedented strike on Israel with a barrage of drones and missiles, most of which were shot down. The Iranian strike was a response to an Israeli airstrike on the Iranian embassy compound in Damascus on 1 April.

The strikes have brought a long shadow war between the two sides into the open and also come against the backdrop of Iran’s support for the Palestinian militant group Hamas, whose assault on Israel on 7 October triggered the invasion of Gaza.

Both seem keen to limit hostilities, and key Arab states are ready to resist Tehran. But real change will require new Israeli leadership

When it comes to the Middle East, it’s the pessimists who look smartest. Predict the worst and you’ll rarely be proved wrong. If you are, it’s usually because your forecast was insufficiently bleak.

So put on your gloom-tinted spectacles and assess the events of the last week. You’ll see the dawn of a grim new era, in which the region’s two strongest powers, Israel and Iran, trade blows directly. Last weekend, Iran crossed what had previously been a red line, aiming a barrage of missiles and drones directly at Israeli territory for the first time. In the early hours of Friday morning, Israel responded with a series of drone strikes on targets inside Iran, including Isfahan, site of an airbase and the country’s burgeoning nuclear programme. You don’t have to be Clausewitz to know that two regional powers, one an aspirant nuclear state, the other already there, engaged in a tit-for-tat exchange of fire aimed at each other’s sovereign terrain spells danger.

Jonathan Freedland is a Guardian columnist

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