The economy was already in poor shape when the war started just over a month ago, my colleague Larry Elliott writes, in his latest column.
Unemployment had been steadily rising during 2025 and growth came to a virtual standstill in the final quarter of the year. Now it is being hit by a colossal supply shock as exports of oil, gas and fertiliser from the Middle East have dried up.
This time last year there were fears of global recession after Trump announced “liberation day” tariff increases on goods imported into the United States. In the end, the global trade war was merely a dry run for the real thing – a proper war in a part of the world that happens to be not only volatile, but crucial for the global economy to boot.
