[ad_1]
Analysts warned yesterday that a prolonged war in the Middle East could push the UK economy into recession following attacks on Qatar’s Ras Laffan LNG facility, which were labelled “a serious escalation.”
Israel’s strike on Iran’s South Pars gas field prompted retaliatory attacks by Tehran on multiple oil and gas sites across the Gulf, causing UK natural gas prices to surge by more than 20 per cent. Brent crude oil prices jumped to $119 per barrel before easing slightly to $113 per barrel.
Bank of England Governor Andrew Bailey stated that the conflict has already driven up global energy prices, which are being felt at petrol stations. The Bank’s Monetary Policy Committee now predicts that inflation could reach 3.5 per cent by the third quarter. Analysts warned that if the conflict persists, inflation could rise to five per cent, while household spending may decline.
Defence Secretary John Healey noted that the best way to relieve pressure on global oil prices is to seek a de-escalation and an end to the conflict. However, he admitted that Iran’s attacks signify “a serious escalation.”
Susannah Streeter, chief investment strategist at Wealth Club, cautioned, “Recession is potentially on the cards. If the conflict continues for an extended period, we can expect people to tighten their belts. Investment and consumer spending are likely to decrease, making contraction inevitable.”
She mentioned that the damage to Ras Laffan, which could take up to five years to repair, would have a devastating impact on markets. The plant supplies around one-fifth of the global LNG, and Asia’s energy markets—including Bangladesh, Pakistan, and India—are expected to be hit the hardest. “Even the UK, which sources most of its gas from Norway, will feel the impact through higher wholesale prices,” she added. “Iran is like a wounded bear, lashing out at anyone it perceives as responsible.”
Andy Mayer, an energy analyst at the Institute of Economic Affairs, stated that the repair timeline for Ras Laffan would lead to sustained disruptions and higher prices for UK, European, and Asian markets, with “no credible plan for relief” domestically.
Defence experts warned that Israel’s strike on South Pars has sent a signal that energy infrastructure is a target in the conflict. President Donald Trump insisted that the United States “knew nothing” of Israel’s strike and would not authorise “this level of violence and destruction.” Still, the escalation has already sent shockwaves through global markets.
[ad_2]
Source link
