On Tuesday, it was said that the world could go into a recession because people are worried that Donald Trump has “lost control” of the Iran conflict.
Oil prices went up to more than $119 a barrel, and a top economist claimed the shock from the war was “spreading from west to east.”
Kallum Pickering, the head economist at City Bank Peel Hunt, stated, “If Europe is next, this will make fears of a global recession even worse.”
It occurred as official numbers showed that the economy was already in a “feeble” position before the conflict started. Nationwide, one of Britain’s major lenders, stated that the crisis could slow down the housing market.
Energy experts, on the other hand, said that higher energy expenses this summer are now “unavoidable,” which will have implications on the whole economy.
Cornwall Insight, an energy consulting firm, warned that the spike in gas prices will likely cause the UK’s energy cap to climb by an average £288 for annual costs, bringing the total to £1,929. “High prices for gas, power, and oil will have effects that go beyond just bills for households,” it said.Inflation and growing project prices could make people less likely to invest and slow down the building of new infrastructure.
The Institute of Directors, a major business group, did a survey and found that managers are less confident in the economy than ever before.
There are rumors that Donald Trump is willing to give up on the war in Iran without trying to reopen the Strait of Hormuz.
There have been speculations that Donald Trump is ready to end the war in Iran without trying to reopen the Strait of Hormuz.
The serious scenario has expanded from the Strait of Hormuz issue, which is the canal that carries a fifth of the world’s oil and gas supplies and has been effectively closed by Iran. Mr. Pickering warned that the closure was generating a “global supply shock” and that “serious dislocations” were likely to happen.
There have also been speculations that Mr. Trump is ready to end the war without trying to reopen the Strait.”Donald Trump may have lost control of the situation, which makes a quick resolution harder and raises the risk that the Strait will stay blocked even after the fighting ends,” Mr. Pickering wrote to clients.
He claimed the disruption may affect “all energy and energy-intensive sectors,” such as pharmaceuticals, tourism, agriculture, and technology.
The Organisation for Economic Cooperation and Development (OECD) said that the UK would be the worst affected advanced economy and lowered its growth forecast for the UK.
The Office for National Statistics said that the GDP only increased by 0.1% in the last three months of last year.
Martin Beck, the head economist of the consulting firm WPI Strategy, said that growth performance was “weak.” He added, “It’s easy to see the economy stagnating or even slipping into recession.”
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