The Iran war caused major supply-side shocks to the global economy — disrupting trade through the Strait of Hormuz, spiking fuel prices, and triggering cost-push inflation. While a ceasefire has eased oil prices, the long-term damage to infrastructure, investment, and productive capacity means slower growth may persist for years.

Despite IMF warnings, the UK's growing reliance on renewables, domestic energy production, and energy efficiency may make it more resilient to the Gulf energy shock than widely claimed.

The Iran war has sharply reduced UK business confidence, as rising costs, inflation, and uncertainty discourage investment. Combined with supply disruptions and higher energy prices, this raises the risk of stagflation and slower economic growth.

The World Economic Forum in Davos brought global leaders together to address major challenges like climate change, technology, and economic uncertainty — highlighting the need for collaboration in an increasingly complex world.

Rising UK food prices provide a real-world example of cost-push inflation, showing how higher production costs can squeeze incomes, reduce spending, and create the risk of stagflation.