The has FT noted that:
Economists expect the inflation shock driven by the Iran war to be less severe than the surge in prices during the 2022 energy crisis, according to an FT analysis.
An FT review of forecasts collated by Consensus Economics shows that inflation projections have on average increased by 0.8 percentage points since the Middle East conflict began in late February. This is far below the 2.3 percentage point rise in economists' forecasts three months after Russia's full-scale invasion of Ukraine in February 2022, which triggered a race in Europe to secure alternative gas supplies.
The opinions were backed by charts.
I have to say, I have been in this game for a long time.
I can recall 2008.
I can recall the near-universal delusion about what was to come at that time. That is exactly what is happening here.
And the comparison with 2022 is absurd. The current situation is much worse than it was then, already very real, and has an obvious impact that, as I explained this morning, can only get worse.
In November 2008, the Queen asked the Bank of England why it had not seen the global financial crisis coming. The honest answers were that it was looking the wrong way, and that was because they assumed it could not happen. She did not get those honest answers.
And the same things are happening now. Nothing has been learned. Nothing has changed. Here we go again, although this time it may be very much worse.
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That graph for the UK is the worst of the lot – or the best if you are a market vulture/rentier.
Have we been as badly managed as a nation ever before? The Tories seriously damaged us and Labour has done too little about it, being nothing but part of a privately funded political cartel. Terrible.
The assumptions appear to be that the Straits of Hormuz will “reopen” very shortly and things will get back to normal very quickly.
Whilst the reality is already fertiliser costs have gone up 70% +. This will hit food production and result in much higher food prices.
“Normality” is world wide now 20% less is coming out of the Gulf states. This will hit production of chips. medicines and so on.
Why such faith in economic modelling that is clearly very wrong?
Why such inability to see what is really happening in the real world?
I wish I could answer your questions.
Disaster capitalism Mr Fairhall – that’s all this is, taking advantage of disaster, creating panic, making money. Or should I say ‘moving it around’. Survival of the fattest even.
Greeting from Florida with a dispatch aka “News of the Weird”!
From Tuesday of last week until yesterday (Tuesday), the price of gas (petrol) has fluctuated +/-0.35 cents a gallon.
I have lived through every “US Energy Crisis” since the mid 1970s and I have never seen anything like this.
Footnote: “News of the Weird” is (or was) an actual website. Florida has so much “Weird” that it actually earned it’s own section tab.
I like News of the Weird
El Niño creates a double whammy which will also have a significant impact on food production and prices in the next year or two. Some suppliers are already taking steps to deal with its expects impacts (e.g. less fodder for livestock) so there will be less food available later this year and next year. There is no bargaining with a climate perturbation of this nature – it happen periodically whether you want it to or not, and the only significant variables are when it peaks, how high, and how long it lasts.
Agreed
On top of Trump’s folly
I think that one answer is that the neoliberals have their own “fiction” rates of inflation. The UK has had it for a long time. The CPI rate, which is what the govt often refers to, is no reflection of the real inflation in the economy for most people when it comes to those things we need. Anything to do with housing — house prices, rents, council tax, water, gas/electricity, travel costs, insurance, etc. And in the last few years food prices have gone up massively.
I recently read that the unit cost of gas for the home will go up, just in time for winter, by about 26%. What answer does the govt have for that? Targeted support. I suspect that will be very limited.
It is no answer to the cost of living crisis and perpetual austerity now imposed on people as the new neoliberal norm.
Once you are struggling to pay the bills for what you need, who cares about the fact that the gadget that you don’t need, is still being sold for the same price of a few years ago. When people stop spending, it is on the stuff they don’t need — which is what makes up most of the CPI.
The political elite either don’t get it, or they do, and they lie.
The modern western world is governed by fiction economics, and it is incredibly dangerous to our well-being.
Much to agree with
As with climate, the mere hint of collapse in economics is verboten.
Might it be that the main stream media function to manipulate rather than inform reasonably and, like so many governments, aim to please big time rentiers?
https://www.thecanary.co/global/world-analysis/2026/06/01/false-flags-and-wartime-propaganda/
Might “nothing has been learned or changed” because the types of people/personalities who dominate politics and journalism are much the same as before?
Might a possible cause of such be that admission to these roles is restricted, and promotion even more restricted, to those who are group conformists?
“Might “nothing has been learned or changed” because the types of people/personalities who dominate politics and journalism are much the same as before?”
Stupid “people/personalities who dominate politics and journalism” have an inherited genetic foible .
Nothing has been learned by these people since their grandparents dominated and made the same mistakes during the “intra-war” years and “the Cousinhood Family” continues to screw things up through today.
Like the British Royal Family, the stupidity crown is passed from one generation to the next.
I am not sure they are all third generation wealth
But they have internalised neoliberalsim
Professor Murphy,
Is their a difference???
Like wealth and racism, the stupidity gene for believing neoliberal financial foibles can be passed from generation to generation.
For powerful and very wealthy people, the consequences are unimportant, they will stay on top, even after the crash – still very wealthy, still safe from inflation and shortages. The collapse still leaves them on top. So no expectation of change there, unless they experience balance and vision interruptions on a road to Damascus.
For the less powerful, but who are nevertheless influential, in media, broadcasting, lower levels of politics, lecturing in economics (!), serving the interests of the very wealthy and powerful, perhaps even employed by them, the questions for them may be:
1. Do I believe this 46 year old neoliberal garbage I pump out daily, or am I just saying what I’ve been told to say by the Chief Whip, or editor, or since I did my PPE?
2. What will happen to ME personally if I am wrong, and we have a crash? Is MY future secure?
3. What will happen to ME if I start thinking for myself and stop lying about macro-economics?
4. Do I really care about anyone else OTHER than my own family? If yes, then do I ever think what will happen to THEM?
That moral analysis, for me, is key. I’m not qualified to draw economic graphs – but I do find myself thinking a lot about the moral health of MP’s, journalists, pundits, broadcasters – those who manipulate public opinion and enact policies – and I include our PM and Chancellor in that group along with the Cabinet.
What IS going on in their souls/consciences/hearts as they march us all towards the cliff at Beachy Head?
Much to agree with
This is the first MSM indication I have seen, regarding actual supply issues.
https://www.theguardian.com/business/2026/jun/03/rural-uk-particularly-at-risk-of-diesel-shortages-if-iran-war-continues
Thank you. I put it on Twitter
” I can recall 2008”
I can recall 1970s. The measures taken then had a severe impact on everyday life but similar measures now would feel significantly worse due to our increased reliance on electricity to operate our lives.
And there is a wheat shortage that very few people are talking about.