The FT has reported this morning in an email:
Oil prices surged as much as 13 per cent as the widening conflict in the Middle East threatened global energy supplies. Traffic through the Strait of Hormuz has dried up.
I did, of course, anticipate this yesterday afternoon.
I am also aware that there are those who say "so what?". They are looking at this oil price chart and saying the point we have reached is not so abnormal, so what is the big deal?
Source: Trading Economics, this morning
My answer to that is that the downward trend over 2025 (the Trump-created blip in April, apart) has been why inflation has declined, and the reversal in that context is significant, real, and will have an impact. External shocks are always what create tipping points when it comes to inflation.
There is one other thing to note. The Bank of England is forecasting very much reduced inflation at present, with stability around the 2 per cent target firmly fixed on its agenda. This could be seriously upset by what is happening, and if it is, that will make a complete mockery of the Office for Budget Responsibility forecasts that are being issued tomorrow, about which Rachel Reeves will speak in the Commons tomorrow lunchtime, which I will be discussing on Radio 2 tomorrow at around 1 pm with Jeremy Vine. Whatever she says might happen probably won't now.
Wars to save political skins by decapitating heads of state, whilst killing innocent victims, have consequences. One is that the economy might be heading into troubled waters, contrary to everything she wants to suggest.
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The Guardian had headlines 2 days ago saying she would be hoping for a “boring” steady-as-she-goes” budget.
We are led by donkeys.
Agreed.
All I see is an opportunity for panic and exploitation in the markets.
Of course, the corporate vultures always surge in to scoop anything they can.
Thank you, PSR.
I imagine the Trump gang has been positioning for this turn of events, including on Polymarket, which is part owned by the gang.
Over the week-end, sources in Oman suggested a deal was near, but the US rejected the Iranian offer. Trump admitted planning and the date of execution had been sorted out since December, about the same time as FIFA awarded him their inaugural peace prize.
I suppose if your name is Trump and you’d just stolen millions of barrels of oil from Venezuela and you were in the position to influence the price of it….well that would all be just happenstance wouldn’t it?
I’ve just read on the bbc.
Gas prices have risen sharply on international markets.
In the UK just after midday, natural gas for delivery in April was trading up 42%, at just over 112p per therm.
We know what that means for gas and electricity prices in the UK. If the conflict goes on for any time, expect a big price increase in gas and electricity bills just in time for winter.
With £5 billion of debt already owed, Labour had better be ready to help, otherwise we get another Liz Truss moment.
The sooner we escape from our dependence on fossil fuels the better!
Absolutely!
Let’s not forget that Reform want our country to be dependent on oil and gas. That’s our energy future with Farage in number 10.
I think today is a reminder of what that really means.
And if people have a problem with wind farms and solar panels, they are nothing compared to what fracking will do across England.
The Greens should be all over this.