What the return of geopolitics means for the UK and the world economy

It’s a tectonic shift, that risks splitting the world into two distinct economic blocs, which could very easily become increasingly hostile to one another. Prior to this war, the Covid lockdown had already damaged the world economy to a far greater extent than the 2008 global financial crisis. 

Global GDP shrank an astonishing 3.5pc during 2020, according to the International Monetary Fund, more than twice the 1.7pc contraction in 2009. There was a sharp 6.1pc global GDP bounce back in 2021 – as post-lockdown demand exploded. But ongoing supply chain issues, including Covid-related staff shortages and a lack of vital components, caused prices to surge.

In January 2022, the month before conflict in Ukraine erupted, inflation in both the UK and US was already at a 30-year high. This war has, of course, driven both fuel and food prices up even more, seriously intensifying the cost-of-living crisis, not least in energy-importing Western nations.

Oil…

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