Author: Damian Merciar

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

On reflection, should Rachel Reeves have given an entirely different Spring Statement last week, given that days before, this conflict with Iran had begun and the gilt markets were spasming? They have now trended up… Depending on the length, intensity, and whether or not the UK does involve itself substantially, our entire economic projection in the short to medium term could be altered by this conflict. The fundamentals of her presentation had shifted, and actually a “holding statement” could credibly have been issued in Parliament. Similarly, should this conflict end within the week – as has been signalled – it could have simply resembled a blip in the yield curve… That is before the fiscal reality of how to bring forward structured Defence spending kicks in. It appears worse than this in that of our six Destroyers only three are operational, and two of these are in even lesser states of readiness than HMS Dragon. Again it’s not just Naval deployment It’s also the rather serious consideration of the fact that RAF Akrotiri, as one of our key bases in the entire Middle East area (technically the near East), should have had far more proficient and aircraft and anti-drone technology. This has been known about for a long time. I myself visited Akrotiri when I was in the Forces a number of years ago and then it felt like it was something from the 70’s. I dare say it has now moved forwards to the 90s, but there is still much work to do…

Strategically this US/Iran conflict is a disaster. Negotiations were progressing on the nuclear front, literally the day before Trump decided to mount these attacks. There is no pause for reflection, no moments of quiet; no concept whatsoever of an overarching strength projection, on the part of the US. They said they wanted to silo and focus on themselves, and in the last 3 months alone they have intervened in Venezuela, Nigeria and now Iran.. spending resources and reallocations of materiel, with zero clue as to their intended function. Military Assets are duly not correctly configured for East Asia, and a host of other strategic irregularities. Not least the Iranian conflict strategically benefits Russia by a changing away of the gaze, and by the US themselves acting as first aggressor.. And, of course tactically, by a significant increase in oil price and a potential realisation in the value of Russia’s enormous gas assets.

Quiet – If only the US could simply sit and contemplate what they actually want: no ICE domestically, and, no gung-ho internationally, whilst they do this. These random and inconsistent acts on the international stage diminish the US as the leader of the free world. This free world needs a more stable, “Daddy”, as Mark Rutte, obsequiously referred to Trump – in his capacity as Head of NATO, of course, playing to his vanity, whilst illustrating NATO’s impotence – instead of powering forwards the diplomacy required for far more powerful, succinct and orchestrated European defence integration.

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#Iran #Gas #Geoeconomics #Conflict #US

Down but not out.

It is not possible to achieve regime change from an air campaign alone – no matter how ingenious it is. Without either orchestrating and supporting an internal opposition to act as proxy for your aims, on the ground, we leave the regime wounded and dangerous – and as we’ve seen in January, more than capable of exacting lethal revenge upon its internal dissidents.

For a host of recent political and historical precedents, the West absolutely should not place boots on the ground, as to date, that also has a fairly ignominious history…

There is a slow burning appeal to the US, that simply if new custodians of the existing regime behaved quite differently in how they conducted their external relations: removal of inciting and supporting agent Islamist groups across the entire region, from Lebanon to Yemen. That if Iran, under a modified regime, more willing to engage with the West, without adopting any additional elements of secularization; simply by ceasing to exert intimidatory tactics – that this itself could be considered a win for this air campaign by the US. It is important to stress, that it’s the US with the exclusion of other Western allies, as the legal case for intervention is decidedly shaky. Any concept of a preemptive attack needs to be based on an ‘evidenced’ imminent attack about to be launched – in this case against direct US interests, and there is no such evidence. In my own view, I believe that the UK Government has on this occasion acted entirely correctly.

It’s difficult to discern any coherent plan – other than lopping off of the head, Which the US has now achieved. However an attack has been anticipated by Iran, for a long time and unless significant elements of the IRGC do decide that they have lost the taste for killing their brothers and sisters, and orchestrate an internal rebellion – which given what we saw in January appears unlikely – within a matter of weeks, there will be a new theocratic head of a theocratic country.

This is not to decry the power that will now be exerted by Iran’s neighbours, notably the commercial heft of the UAE, which will not stand for its commercial model of trade, tourism and a stable home for so very many westerners who have relocated there. Similarly the critical rapprochement that was slowly bringing Saudi Arabia and Iran together, will be shaken, precisely at a time that Saudi is seeking to reinvent itself, post oil, with mega projects like Neom. Having a medievalist neighbour that believes everything within missile striking distance, should be struck, is going to prompt some radical and serious diplomatic intervention on their part. It took a long time for thawing relations, initiated by China in 2023. Iran is likely to think twice after any such approach by Saudi.

#Khamenei #Iran #Regime

There is a great line at the end of this article that says quite simply – “Economics is too important to be left to the Economists…” I’ve always attempted to describe successful Economics that is deeply considered, and empirically based – that it be viewed as applied philosophy. Intricate and coherent ideas, working with society rather than attempting to fit the models ex poste, and justifying anomalies through being at the tail end of the distribution curve, and therefore potentially not of equal relevance – when of course, often the models are specified or insufficiently detailed to calibrate for the anomaly….

So, how to proceed? Stop trying to model everything? That might not actually be a bad starting point… I wouldn’t expand on this too much here, but it does not diminish us intellectually to try and explain an idea using words rather than formula. Philosophy itself
managed to convey the profoundest contemplations of life, using words. I also don’t feel that we shouldn’t *not* try to model this complexity – look at weather forecasting! In the last 20 years with the presence of supercomputers, weather forecasting is far more accurate than it ever used to be and looks at similarly complex interplay of “Factors”, humidity, temperature, air pressure etc… Physics itself can discern the likelihood of the existence of life, or the possibility therein, 10 million light years away, through the utilisation of spectrum analysis.

It’s not that modelling isn’t astonishingly powerful. It’s simply that policymakers and political leaders and the electorate who put them there, can’t readily understand this stuff. Who can? There are perhaps a couple of hundred people in the world that can do this spectrum analysis… and yet human society, as is, not yet modelled, is not hugely less complex.

Our awareness of interdependence is greater now than at any time in the past, and so the nature of power in institutions; the rationale for continuing a war rather than striking a peace deal; the simple fact that the price of renewables doesn’t care whether Trump believes in climate change – Economics can, and should, seek to explain all of this. Behavioural Economics, of course, introduced powerful psychological thinking into the discipline. Politics has always been there. I’ve been arguing for a long time for a greater awareness of sociology and anthropology to also be integrated. When the homes of Hollywood’s elite burned in Los Angeles recently, this was quite an argument that you might be able to build a very tall fence on the Mexican border, but climate change isn’t going to respect that. Even if you build it higher. Economics, if it is to remain useful, needs to strive to explain these things to those who can effect change.

https://www.theguardian.com/environment/2026/feb/10/rethinking-economics-student-academic-organisation-changing-education

Surely it is fairly straightforward. People are leaving the Conservative Party because it is more like a historical social club than a coherent political party, with any agenda whatsoever for a program of Government..

Kemi Badenock cannot say, “We need to know who’s on board – and good riddance to the rest of them!” Because what is she positing? On board with what? I’m supposed to be a policy professional, And I have a long history of political engagement, and yet I as a professional, have no clue whatsoever what the Conservative policy position, on pretty much anything, is?

So if you are faced with an entirely unpopular, distrusted, and toxic brand with no policies whatsoever – and a rising, popular bandwagon of nationalist fervour, replete with bunting, high-profile defections and a celebratory atmosphere…. Aren’t you going to sidle out of the room where the alcohol has dried up and somebody is badgering you in the corner with a consideration of railway provision in the East Midlands, and go and join the banging new nightclub up the road? It doesn’t particularly matter that the “new” nightclub is playing Sounds from the 70s and their keynote speaker is Alf Garnet.

Nope. It’s “the energy wot wins it”. Direction, Policy, belief, commitment – let alone enactment. (Lord knows what Reform will do if they actually win!) All of that can come later. For now they are just enjoying throwing shapes on the dance floor…

#suellabraverman #Reform #UKPolitics #ConservativeParty

Realistically it has taken me 40 years to accumulate my skills and knowledge in Economics and all the facets of International Relations that feed into credible Geostrategy. What I am not – and yet what seems a critical skill in today’s entirely fissile and unpredictable world, having anything to do with the US – is a Psychologist.

Trying to Game Theorise different plays and navigate the intricacies of Trump’s mind, appears to be an entirely unproductive and impossible task. I’m not sufficiently trained in the traits of narcissistic personality disorder, nor the application of sociopathy from a platform of ultimate power; nor the vulnerabilities that this exposes in his respondents… Nor the confused interplay of historical precedent – for instance, “The expansion of our territory. Because that is what was achieved by our truly great Presidents.”

We cannot treat each of these outbursts as warranting a dignified, let alone a diplomatic solution. They are random, and inconsistent. There is no overriding theme, except in my view, the very great attention that Trump gleans through having the world gaze at him in trepidation as to his next move. Surely the correct response is to ignore these outbursts… I believe a forensic psychologist would present evidence that the patient is not a credible witness and his testimony cannot be relied upon. He lacks foresight and an understanding of agency. That to respond in appeasement, or even to seek an audience, is simply to feed this delusion. The fact that the delusion itself is actually democratically granted through the holding of Office, should surely suggest the incumbent is unfit for such Office? Did Madison anticipate such a mind in his and others’ drafting of the US Constitution? Of course, it is robust enough to survive this.

A more pressing question is: Is it robust enough to remove on these bases above, the holder of the highest Office of State?

#Trump #USConstitution #Geopolitics #Psychology