UK Economy at Risk: Government Braces for Fallout from Red Sea Disruptions
In response to recent US and UK strikes in Yemen over Houthi rebel attacks, oil prices have surged by 4%, reaching $80 per barrel.
Excel Magazine International understands that the UK government is concerned about potential disruptions to the economy, with scenarios including a $10 increase in crude oil prices and a 25% rise in natural gas.
Ongoing Red Sea attacks may impact the UK economy, risking inflation and increased shipping costs.
Prime Minister Rishi Sunak noted “major disruption” to a crucial trade route, while economist Simon French highlighted current energy prices as disinflationary.
Houthi attacks have intensified since October, affecting global shipping through the Red Sea.
The US reported 27 attacks since mid-November, leading to diversions and shipping disruptions.
Around 15% of global seaborne trade passes through the Red Sea, impacting grain, oil, and liquified natural gas transportation.
