The world economy survived the shocks of the Ukraine-Russia conflict, which has had limited impact on economic growth. But the escalation of hostilities in the Middle East has transformed what had been, until early 2026, a surprisingly benign outlook into a far more uncertain one. It has created the ultimate test for how resilient the world economy really is.
Amid stalled ceasefire negotiations, the US president, Donald Trump, has threatened a blockade of vessels transiting through Iranian ports in the strait of Hormuz. This sent oil prices back up over US$100 (£74) a barrel. Meanwhile the current ceasefire is looking very shaky.
