Strait of Hormuz domino effect could lead to job losses in the UK

The economic shock of the Iran war could lead to job losses in Britain over the course of the year.

Pat McFadden, the Work and Pensions Secretary, told Sky News the impact of the continued closure of the Strait of Hormuz could feed through to the labor market.

The blockage of the strait, through which a fifth of the world’s oil normally flows, has driven energy prices up across the world.

McFadden said the economy

He added: ‘The latest unemployment figures for February showed a fall, interest rates were expected to come down, and the markets were pricing in a couple of cuts during the course of the year.

‘The truth is, with the effect of the Iran war, we can’t count on any of that at the moment. There is likely to be an effect on prices, which feeds through from energy costs, and there may well be labor market implications.’

Asked if this meant job losses, McFadden replied: ‘Yes. It could happen.’

US President Donald Trump said overnight that America will pause efforts to guide stranded vessels out of the Strait of Hormuz, dubbed ‘Project Freedom’, in order to try and finalise a peace deal with Iran.

But he confirmed a US blockade of Iranian ports would remain in place while talks were held to end the war.

The conflict in the Middle East is also likely to push up the cost of food in the UK within weeks, a union boss warned.

Tom Bradshaw, president of the National Farmers’ Union (NFU), said the whole food supply chain could be affected by the war, with the cost of some crops rising within six weeks.

Bradshaw warned that a protracted conflict in the Middle East would have a ‘dramatic impact’ and turn the world’s supply chains ‘upside down’.

He told BBC Radio 4 that the price of tomatoes, peppers, and cucumbers could increase next month, as those crops rely on greenhouse production.

The cost of other items such as milk and meat could rise within three to six months.

Farmers of wheat and barley would be better protected as they buy their fertiliser in advance.

While retailers and farmers may bear some of the cost of rising fuel prices, some of the burden is likely to be passed on to consumers, the NFU warned.

The availability of some goods can also be hit by the disruption to shipping routes, the British Retail Consortium (BRC) said.

It added that retailers were working to mitigate the cost for consumers and are ‘adept’ at managing disruption to supply chains.

Get in touch with our news team by emailing us at webnews@usnewsrank.com.

For more stories like this, check our news page.