According to a prominent global policy body, the UK is facing the most significant growth damage from the Iran war among the G20 major economies. The Organisation of Economic Cooperation and Development (OECD) forecasts 0.7% economic growth in the United Kingdom this year, down from 1.2% previously. Inflation is also expected to be greater than anticipated.
The OECD has reduced projections for many of the world’s largest economies in response to the US-Israeli confrontation with Iran. A prolonged conflict could cause “significant energy shortages” around the world, it warned, while if the dramatic spike in fertilizer prices continues, agricultural yields will suffer and food prices will skyrocket the next year. Wholesale oil and gas prices have risen since the war began, owing to disruptions in supply caused by the effective closing of the Strait of Hormuz, one of the world’s busiest oil shipping channels, as well as damage to Middle Eastern oil and gas facilities.
Experts warn that continued high energy prices will slow development, feed inflation, and make interest rate reduction less likely. The impacts are already being seen at the pump, with UK drivers seeing higher fuel and diesel prices, as well as heating oil consumers. Mortgage lenders responded by hiking rates and canceling hundreds of transactions.
Also Read:
Is Matt Brittin, The Former Head of Google, The Best Candidate to Lead the BBC?
