Posted 1/12/2024, 3:39:00 PM
UK models show Red Sea disruption could trigger recession, but escalation risks wider conflict and oil at $100
- Treasury has modeled scenarios showing disruption in Red Sea could shrink UK economy, risking recession due to $10 per barrel rise in oil and 25% gas price increase
- Overnight strikes on Houthis aimed at reversing delays and disruption to Red Sea trading routes and restoring safe passage
- But escalation risks wider Mideast conflict and another energy price shock, with oil potentially hitting $100 per barrel
- Europe now more dependent on Qatar for shipped gas after Russian supplies stopped; price would surge amid Gulf disruption
- Serious escalation could further disrupt global economy, entrenching inflation just as central banks considered cutting rates