Middle East Conflict Disrupts Shipping, Threatens to Worsen Inflation and Slow Growth
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Escalating conflict in the Middle East has disrupted vital shipping routes like the Suez Canal, causing delays and higher costs for global trade. This could worsen inflation and economic growth.
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Oil and gas prices have spiked due to the crisis, increasing Europe and UK's reliance on fossil fuel imports from the Middle East.
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Shipping disruption reminiscent of Ever Given crisis; companies warn of empty shelves and higher prices. Adds thousands of miles to Europe-Asia routes.
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Economists less concerned than headlines suggest - demand is weaker, shipping capacity expanded, and oil prices still below 2022 peak. But risks if crisis escalates.
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Hopes for interest rate cuts and economic boost in 2023 election year for Biden and Sunak could be dashed. Global supply chains as interconnected as ever despite talk of “reshoring.”