The European Central Bank (ECB) kept interest rates unchanged but stated it is closely monitoring the economic impact of the Iran war, particularly on energy prices and inflation. Future rate hikes remain possible if deemed necessary to meet the 2% inflation target.
The US-Iran war highlighted the fragility of global supply chains, dependent on maritime chokepoints like the Strait of Hormuz. Disruptions led to increased costs and logistical problems, necessitating "war-room planning" for future crises.
UK public sector net borrowing hit £23.3bn in May, significantly higher than the £18.5bn forecast by economists. This surge, attributed partly to the economic impact of the Iran war and increased interest costs, presents fiscal challenges for potential Labour leader Andy Burnham.
Fears of negative equity for first-time buyers in Sydney and Melbourne are easing as falling house prices are concentrated in the top end of the market. Data shows the cheapest properties have seen modest gains or slight declines, unlike the upper quartiles. Experts suggest low unemployment and low arrears rates mitigate mortgage payment risks, though negative equity can limit options for selling or refinancing.
New data suggests falling house prices in Sydney and Melbourne are concentrated in the upper market segments, potentially assuaging fears for first-time buyers with small deposits who typically purchase in the lower end.
Saudi Energy Minister Prince Abdulaziz bin Salman stated at the St. Petersburg International Economic Forum that the global energy sector needs more stability to avoid further financial losses, emphasizing resilience amidst difficult circumstances.
Pacific nations are grappling with a severe fuel crisis, exacerbated by the US-Israel war on Iran, leading to soaring prices, potential economic slowdown, and increased inflation. The region's heavy reliance on imported oil for transport and electricity makes it particularly vulnerable, impacting daily life, businesses, and government budgets.
Global businesses face at least $25 billion in losses due to the US-Israeli war with Iran, driven by rising oil prices, disrupted trade routes, and higher operating costs. Airlines are most affected, but the impact is spreading across sectors.
SEOUL, May 5 (Yonhap) -- Samsung Electronics Co.'s board chairman on Tuesday exp...
Russian journalist Solovyov has criticized Italian PM Giorgia Meloni over her Ukraine stance, migration policy, and the economic fallout Read Full Article at RT.com
Renault's UK managing director Adam Wood has reported a 'seismic shift upwards' in electric vehicle interest following oil price spikes caused by the Iran war. EV enquiries on Renault's website are up 42%, with electric vehicles now accounting for almost 50% of the company's UK sales in April. The Renault 5 was Britain's bestselling electric car that month. Oil prices remain above $111 per barrel amid ongoing tensions over the strait of Hormuz.
NatWest reported first-quarter operating profits of £2bn, up 12% year-on-year and ahead of analyst expectations of £1.9bn, but warned the Middle East conflict could cost £140m. The bank booked a £283m impairment charge, with nearly half due to revised economic forecasts reflecting increased geopolitical risk. It now expects UK GDP growth of just 0.4% this year, unemployment to rise to 5.5%, and inflation to hit 3.5%, while forecasting base rates will remain at 3.75% until 2030.
Whitbread is cutting 3,800 jobs in the UK and Ireland, representing 12% of its workforce, as it transitions to a pure hotel business. The move follows increased tax burdens from the 2025 budget and pressure from activist investors.
The Strait of Hormuz remains effectively closed as both Iran and the US maintain blockades, with indirect negotiations stalled despite a ceasefire in place. The US demands focus on Iran's nuclear programme, missiles, and regional proxies, while Iran offers temporary enrichment limits in exchange for sanctions relief. India, holding the BRICS presidency, is positioned to mediate alongside China to pressure both sides to reopen the critical global energy artery.
Bank expects its base case for GDP growth to be 0.5% this year, lower than IMF’s 0.8% prediction for BritainBusiness live – latest updatesLloyds has warned that the economic fallout from the Middle East conflict could cost it £151m amid rising unemployment and inflation and a slowdown in the housing market.The FTSE 100 group, whose brands include Lloyds Bank, Halifax and Bank of Scotland, issued a downbeat economic forecast that it said reflects the stagflationary consequences – the double hit of rising inflation at the same time as slower economic growth – for the UK and global economies. Continue reading...
Meeting could coincide with possible Commons debate on claims he lied to MPs about Mandelson’s vettingDowning Street has said that the UK is “in a good position” to handle the global supply problems caused by the Iran war not being resolved.Speaking at the morning lobby briefing, the PM’s spokesperson said:We remain focused on a long-term, permanent solution to the crisis. As a result of the forward-planning, the government undertook over the past few months, the UK is in a good position.We’re ramping up planning for all different potential impacts on the UK economy and consumers, and that means focusing on a live monitoring of stock levels and what plans are in place for addressing supply chain disruption.Even Boris Johnson didn’t block his MPs voting for scrutiny. Labour MPs must be given a free vote on any motion to refer Starmer to the privileges committee, not forced into being accomplices to a cover-up.If Keir Starmer has misled the House and the public, he must be held to the same standard that we should expect of any prime minister. Continue reading...
The United Nations Development Programme warns that economic fallout from the Iran war could push 32.5 million people into poverty worldwide, with developing countries most affected. The report cites a 'triple shock' of rising energy prices, food insecurity and slower growth, with half the increase concentrated in 37 energy-importing nations across the Gulf, Africa, Asia and small island states.
The United Nations Development Programme warns that the Iran war could push 32.5 million people into poverty worldwide in a worst-case scenario. The conflict has created a 'triple shock' of rising energy prices, food insecurity and slower economic growth, with developing countries bearing the heaviest burden. About half the increase would occur in 37 energy-importing nations across the Gulf, Africa, Asia and small island states. The UNDP estimates $6bn in cash transfers would be needed to protect vulnerable households.
UK consumer confidence fell to its lowest level since October 2023 in April, with multiple surveys blaming the US-Israeli war on Iran for surging cost pressures. The GfK consumer confidence index dropped four points to -25, while the S&P Global PMI recorded the biggest jump in business costs since 1996. Over a quarter of firms expect to raise prices next month - the highest since January 2023 - with energy costs cited by more than a third as a key driver. Economists warn UK inflation is on track to rise sharply, potentially forcing the Bank of England to raise interest rates.
France is freezing €6 billion in spending this year due to economic fallout from the war in the Middle East. The freeze includes €4 billion from the general budget and €2 billion from the social security budget. Costs include €3.6 billion in higher interest payments on government debt, €1 billion from inflation effects, €1 billion in extra military spending, and the remainder for citizen and business support. The government has lowered its growth forecast to 0.9% while raising inflation to 1.9%.
The IMF has raised Russia’s growth forecast on higher commodity prices amid the global economic fallout from the Middle East war Read Full Article at RT.com
