Global Conflict and the Cost-of-Living

The US-Israeli war with Iran is putting lives at risk and exporting economic pain far beyond the Middle East. The United Nations has condemned deadly strikes that killed civilians, while attacks and threats around the Strait of Hormuz have disrupted vital energy supplies and shipping.

People in Somerset are not insulated from these events. Taunton and Somerset are not immune to these shocks: the cost-of-living crisis is affecting all of us, and rising fuel and transport costs are adding further pressure on households, businesses and public services. 

The International Energy Agency forecasts global oil demand will fall by 2.6 million barrels a day in 2026, citing the war, restricted supplies and soaring fuel prices. 

The IMF projects slower global growth and higher inflation this year, with further conflict escalation among the risks. 

A market crash or worldwide recession is not inevitable, but the longer this continues, the greater the danger to investment, jobs and living standards.

The Government’s new “Be Ready” advice asks households to keep basic supplies, including food and water, to manage up to three days of disruption. 

Ministers say the campaign is preparation for emergencies such as severe weather. Cyber attacks and hostile-state activity are also part of the wider security debate. These warnings show how vulnerable daily life can be when essential services, communications or payments are disrupted. 

The wars in Iran and Ukraine form part of a more unstable international climate, although the Government has not said either war caused this particular advice.

Financial markets also show how interdependent the world has become. US Treasury figures for August list Japan’s holdings at $1.068 trillion, the UK’s at $1.009 trillion and mainland China’s at $590.7 billion. 

These figures do not prove coordinated selling: the Treasury cautions that its custody data may not identify the ultimate owners precisely. Separately, the US sold euros to buy yen during currency intervention with Japan. That was a currency transaction, not a sale of European shares.

Some arms companies and energy producers may profit from conflict and scarcity. But that does not explain the war’s purpose or provide a credible endgame. The public deserves to know what achievable outcome is being pursued and how escalation will stop.

This is the dangerous consequence of hard-line Republican policies that put military force and pressure ahead of sustained diplomacy. Israel’s government and Iran’s leadership are responsible for their own decisions too, but Washington has immense power to choose another course. 

The UK should press for a ceasefire, protected shipping, civilian safety and serious negotiations. The longer this continues, the more ordinary people everywhere will pay.

Habib Farbahi
Taunton