Bank of England’s decision to hold rates…Part of me is actually inclined to suggest an interest rate cut. Of course I get the whole rationale for holding rates, with actually a reversal of the anticipated two cuts… Monthly GDP figures for December showing 0.1% growth, followed by 0% in January, indicates a nearly entirely flatlining economy. It’s usually best not to use monthly figures yet, in both the third and fourth quarters of 2025, the UK economy grew by 0.1%. In addition of course, UK Unemployment is at 5.2% for the 3 months to January, marking a 5-year high, with nearly 2 million people officially unemployed – excluding the significant numbers, estimated at 9 million adults who are economically inactive, surely the highest rate recorded, at just over 20%
There is a widespread fear youth unemployment is becoming entrenched… With roughly three quarters of a million young people unemployed, excluding those who are outside of both education or training, yet not classed as unemployed…
Meanwhile, an essential geopolitical assessment shows, actually for a host of US political reasons – a significant political vulnerability in the relationship between Gulf Cooperation Council (GCC) countries and the US. In no small part caused by the very presence of US bases on their territory, that are designed for protection – have directly led to these countries being targeted.
Some analysts feel that this war is about to hit total stalemate, without any further military escalation on the part of the US – regarding the (im)possibility of troops on the ground – therefore it really does look as if the conflict itself doesn’t have too much longer to run. Domestic US pressures will also likely ensure a change of tack by the US soon, primarily to free the traffic in the Straits of Hormuz.
Yet…the military considerations as to damage done, cannot be glossed over lightly, regarding their impact upon the global economy. Early on the morning of 19th of March, Iran attacked Qatar’s Ras Laffan LNG plant, Which is so large that it produces a fifth of global LNG supply. The Iranian regime has said that 17% of the plant has been so extensively damaged it will take 5 years to fix. This directly equates to roughly 4% of global LNG supply being removed from the market overnight – and whilst UK reliance on Qatari LNG has reduced from a peak of 40% in 2011 to currently 2% of imports, the UK must still buy its LNG at global prices, which have taken a huge spike. Given the importance to the international economy of these refineries across Gulf countries, both Iran and the US have stated in principle they do not wish to target energy production. As so very many of the military targets in Iran have been compromised or entirely destroyed, If there is to be a moratorium on attacking energy, this itself could shorten the conflict. If the US stops fighting, Israel will also stop.
#Economy #Iran #Qatar #LNG
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