US and Israeli strikes on Iran have rattled global markets. Oil has surged almost 10% towards $80 a barrel as traders fear Tehran and its Houthi allies could target oil tankers. Petrol prices and inflation could rocket as a result. Flights at key hubs in Dubai, Doha and Abu Dhabi have been suspended, inflicting still more damage. Ten countries across the Middle East have already been rocked by blasts. If the war spreads and escalates, the economic fallout could be devastating.
Asian markets have already fallen as investors panic, and the FTSE 100 is plunging too. It’s only been saved by a sharp jump in the shares of oil giants BP and Shell, and weapons maker BAE Systems. Which says everything. This could be merely be the opening salvo, and Britain’s economy will not escape the fallout. Worryingly, we’re being menaced by an even more deadly economic weapon of mass destruction. And this one is homegrown.
It comes from our own chancellor. Today we’ve had still more evidence of the damage Rachel Reeves has inflicted on the UK economy. While missiles fly abroad, her assault on jobs, investment and growth continues unchecked at home. The scars are visible on every high street. She’s done more harm to British economic interests than any Iranian drone ever will. And she’s only just getting started.
Tomorrow, Reeves delivers her Spring Statement. She’ll no doubt drone on about how she’s “fixed the foundations” of the economy, and blame Middle East turmoil and global uncertainty for the UK’s woes. But she’s left the economy defenceless.
More evidence of the damage lands daily. Today, the Institute of Directors warned that business confidence has slumped as firms buckle under Labour’s tax hikes and red tape. A survey of more than 500 bosses found deepening gloom over sales, jobs and exports.
The Confederation of British Industry also warned private sector activity is shrinking. It blamed soaring energy costs and new taxes, and Angela Rayner’s workers’ rights laws that are deterring companies from hiring.
Incredibly, business leaders are more worried about what Labour is doing to the UK economy than war in the Middle East or Donald Trump’s tariffs. As operation Epic Fury pushes us closer to World War III, British bosses see their own chancellor as the greatest threat they face. Which is incredible.
The chancellor’s unforgivable £26billion rise in employers’ National Insurance has doomed an entire generation, by making young people too costly to employ. Pubs, shops, restaurants and hotels are taking direct hits. Just look at our high streets. Boarded-up windows and empty precincts resemble a town after an air raid. As I wrote a few weeks ago, Rachel Reeves may as well have bombed them from the sky.
At the same time, energy secretary Ed Miliband’s insane net zero drive is eroding Britain’s industrial base. As Iran threatens global oil supplies, we’re reminded how vital fossil fuels remain. Yet Miliband is blocking new North Sea oil and gas exploration, a self-harming move no other country would contemplate.
Trump says he’s ready to open talks with bomb-blitzed Iran in pursuit of regime change. If peace breaks out, global markets may steady. That won’t rescue Britain. Until there’s a change of regime in Westminster, our bombed-out economy won’t recover.
A general election will offer that chance in 2029. Until then, the carnage will continue, inflicted by a reckless government that’s turned its fiscal artillery on us.