Red Sea attacks could shrink economy, warns Treasury

Ongoing attacks on shipping in the Red Sea are causing concern for the government, as it could further shrink the UK economy. According to the BBC, the Treasury has modelled scenarios that include a potential rise of over $10 per barrel in crude oil prices and a 25% increase in natural gas.

Following military strikes, the price of Brent crude, the international benchmark for oil prices, increased by 2% to $78.94 per barrel on Friday. Meanwhile, US West Texas crude rose by 2.1% to $73.55.

Vincent Clerc, the CEO of shipping giant Maersk, noted that “significant disruption” to global trade is already being felt, reaching down to the end consumer. Before the military action on Thursday, Clerc had called for a “stronger mobilisation” to counter the attacks, warning that they would lead to higher prices for customers.