DUBAI, July 2 -- For residents already absorbing record housing costs, Dubai's May inflation report delivered a figure that crystallizes how far the US-Iran war's economic shockwave has traveled: 5.5 percent annual price growth, the fastest since before the pandemic, with the blame split almost evenly between a housing market that refuses to cool and a fuel price that has only partially walked back from a 60 percent surge.

The Dubai Statistics Centre data, released Thursday, showed inflation accelerating from 4.8 percent in April, with the two dominant basket components, housing and utilities at 37.5 percent of the index, and transport through fuel costs, pulling in the same direction. Food and beverage inflation, representing 9.6 percen...