As the FT notes this morning:
The Panama Canal Authority is to limit the number of daily ship transits from September because of a lack of rainfall amid an intensifying El Niño weather pattern.
The waterway vital to global shipping will allow 32 vessels to pass daily from September 15, compared to the current 36, the authority said on Thursday.
They added:
This year's El Niño, when surface temperatures in the Pacific Ocean rise potentially causing severe drought and warmer winters, could be one of the most intense ever. Leading climate scientists have called it a “super El Niño” and expect severe weather disruption across several continents.
This is an issue I have not discussed much to date, because El Niño effects are not guaranteed, and for once I held back, hoping that projections for such an event this year might be wrong.
That no longer looks to be the case.
What are the likely effects going to be? I did some searches, and let me summarise what I found (and yes, I did use AI) like this:
El Niño is likely to strengthen substantially during autumn 2026 and persist into 2027. Its main global effects are likely to be higher temperatures, disrupted rainfall, drought in parts of Australia and Southeast Asia, flooding elsewhere, increased wildfire risk and disruption to agricultural production.
For the UK, the direct weather effect is uncertain, although a wetter and stormier autumn and early winter is somewhat more likely. The bigger risk may be economic. Poor harvests and disruption to global food and commodity production could raise food and import prices, adding another supply-driven source of UK inflation at a particularly difficult time.
This is serious, and in light of the topics I picked up on in this morning's video, most especially so.
By how much will the Bank of England punish us for an event over which no one in this country has control?
The madness of their monetary policy has to end.
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On top of climate change, the pattern for the UK is likely to be more extreme weather – wetter winters (so damage to crops and flooding) and hotter and drier summers (again bad for crops, and also water shortages). And all of that on top of the current disruption to the supply of fuel and fertiliser caused by the blockage of the strait of Hormuz.
What we are missing is resilience. Decades of neoliberalism has made the economy lean and “efficient” and hyper connected and “just in time” and global, but intensely fragile. We need to be able to cope with extremes, both peaks and troughs, and unexpected stochastic events. We need houses and transport that can cope with extremes of heat and cold. We need a food supply that can continue to feed us. We need water storage to capture the winter rain, firstly to stop the immediate flooding and then to continue the vital supply through the long dry summer.
Are we in any way prepared for what is about to happen? Next year could be very ugly.
Much to agree with
“made the economy lean and “efficient”.. indeed. & it is quite easy to efficiently do, the wrong thing.
The question is NOT: “Are gov policies efficient” but.. “are gov policies effective”, and by extension “is the economy effective?” (or is it just efficient at keeping the rich richer?).
I am confident that the BoE will efficiently raise interest rates (= a punishment beating aimed at raising morale!! – hip hip hooray for the BoE).
My first thoughts are that we need to take back control of water.
This means that we have to invest in the technology and infrastructure to do that.
That means that such investment has to be affordable. This cannot be seen as a means to simply profit from interest rates because this affects us all. Investment is survival now surely so that we can adjust to what we have created. The sovereign power to create the money, invest and tax has to be unleashed. Handing this over to a bunch of monopolists like the banking sector and private investors would be a disaster.
Starmer should have IMO nationalised water on coming into office. I suspect he was too afraid of the City to write off or write down the debts of the companies. We need courageous politicians. Someone once wrote a book The Courageous State. The name of the author escapes me.!!!
🙂
Just read up on the history of canals in the UK and the problems and disputes over water
Thats before you multiply it to take into account the scale of the Panama Canal
What we are seeing with the canal is the sort of ‘unknown’ that can suddenly catch the Global Economy without warning.
How many other ‘Known Unknowns’ are out there waiting to catch us out?
Let alone the ‘Unknown Unknowns’
Much to agree with
I know nothing about marine engineering and canals. So can s/o please explain to me WHY severe weather and water shortages mean fewer ship passages? I’m not challenging it, just pleading ignorance.
Canals use water as ships go through locks on their way up or down hill.
So, less water means fewer ships can go through the locks in question, or the canal will run dry.
Studying how canals work has similarities to how the monetary system works. I used to be very interested in the Kennet and Avon canal, and a friend worked on restoring the Crofton Beam Engine. The canal uses up water as boats go up and down down hill by draining it from a lock to a lower level (going downhill) or filling it from a higher level (going uphill), eventually running out to the sea. So if nothing was done it means that the highest point would become dry. However, what they do is to retain some of the drained water in basins and then pump it back to the top. In some cases it is necessary to replenish the lost water from nearby rivers or lakes, and in the case of the Panama Canal that is the Gatun Lake, which becomes seriously depleted in dry weather as it also supplies drinking water. By far the largest loss is though evaporation, obviously higher in hot weather and not replenished by rain. There are diagrams showing money flowing from a bath, but they don’t show where the money comes from in the first place.
Thanks, Nigel
‘Let them eat nothing!’
How on earth can we have a public discussion about mad monetarism if our ‘public service broadcaster’ makes sure it cant be discussed?<P>
There was an ‘in depth’ analysis yesterday of our water supply issues on R4 ‘the Briefing Room’ with David Aaronovitch<p>
He had serious- sounding academics – Sir John Armitt, Public Private Partnership Commission, Jim Hall, Professor of Climate and Environmental Risk at Oxford ,Dr Heather Smith, Senior Lecturer in Water Governance at Cranfield<p>
In their half hour in depth discussion – there was no mention of ownership. A main conclusion was that the public is too complacent that ‘they think we are a rainy country ‘. ‘we will have to pay for new investment in reservoirs and pipes from taxes or bills’. But polls show the public is very concerned about the disaster of privatisation and wants water o be publicly owned. <p>
Aditya Chakrabortty in the Guardian talks about the ‘ transnational network of spivs and cowboys who have stripped the water industry of every penny’.<p>
Who is funding these ‘academics’ – and didn’t it occur to Aaronovitch to ask if they had any thoughts about the billions of dividends paid and billions of debt – which have made the companies essentially bankrupt?<p>
Despair.
Despair, indeed.
“there was no mention of ownership” welcome to the UK meeja where “discussions” are carefully managed so serfs don’t get the wrong idea. Aaronovitch & the other ciphers were there as a “manage expectations” exercise. I can imagine the discussion in Bushy House about the emission: ….”hmm we need to manage the serfs expectations – on water – do we have a couple of safe pairs of hands to do that? & for christ’s sake don’t on any account mention nationalisation”. It was a reinforce the status quo/legitimacy/don’t rock the boat.
Come on Mr Broadbent – get with the agenda.
I know you covered this many times in many ways but I think an infographic entitled ‘Monetary Madness’ is probably overdue?
Oddly, a title very much like that got added to my list to make this morning.
Great minds, and all that…..
I spotted a story the other day about Britain’s only desalination plant (owned by Thames Water) at enormous cost – it doesn’t work!!
If, as seems entirely appropriate – we were to treat food growing as survival in war time, then what would it actually take, and how long – to move as far as is possible, all crop growing to Lowland Scotland and Northumbria?
You are aware a lot of Northumbria and Scotland could nit support arable crops?
Your headline had made me expect a different article altogether. That in the case of the Panama Canal water is a finite quantity. You can’t magically conjure up more of it by borrowing, lending or fractional reserve reservoirs. When you’ve run out the canal stops. But financial liquidity is fundamentally different. Governments can magically bring money into existence and use it to keep an economy in financial drought functioning. But they have written arbitrary and nonsensical rules to stop themselves from doing so.