Rob McCann

🚨: Research suggest that just 3 days of camping in the forest can increase the production of cells that kill cancer by more than 50%.

A thread on my Budget preview speech for the Australian Business Economists in Melbourne just now: The conflict in the Middle East is a defining influence on global growth and inflation this year, and that’s why it will be a defining influence on the May Budget.

Very bad for Britain, which is uniquely susceptible. 1/ The Iran war sent British wholesale gas prices surging — up nearly 90% in a month. This hits Britain with unique force because the nation remains 75% dependent on fossil fuels for its primary energy needs. 2/ As gas sets the marginal price for all electricity, a spike in the Middle East becomes an immediate, unavoidable tax on every British business and household. 3/ The reality is crushing. Analysts warn of household bills hitting £2,500 if the Strait of Hormuz remains closed for more than six weeks. 4/ As energy-driven inflation surges, hopes for interest rate cuts have vanished. Britain is now servicing a £2.9 trillion debt mountain with £114 billion of interest expected to be paid this year. That’s nearly double the nation’s entire core defense budget. 5/To make matters worse, Britain has no supply buffer. Westminster based its storage needs on optimistic assumptions of frictionless global markets. It has a maximum gas storage capacity of just twelve days. Compare that to Germany’s 89 days, France’s 103, or the Netherlands’ 123. 6/ Unable to stockpile, Britain is forced to buy gas at the worst possible moment. European gas futures have already surged above €60 per megawatt-hour, roughly six times the US price. 7/Britain’s main gas provider, Norway, is at maximum capacity, and Qatar (the UK’s swing supplier) had already declared force majeure, halting shipping after the unprecedented shutdown at Ras Laffan. Now, missile attacks on Ras Laffan, and threats by Trump to pull out of the Strait of Hormuz.