Will Suez shipping disruption derail hopes for rate cuts?

David Rees

David Rees looks at the impact recent disruption to shipping may have on inflation, the outlook for interest rates, and deglobalisation trends.

Growing geopolitical tensions in the Middle East have begun to disrupt global supply chains. Following attacks by Houthi rebels on vessels passing through the Red Sea en route to the Suez Canal and key global economies beyond, major shipping companies have warned of significant delays to deliveries. Satellite images show that virtually no ships destined for major European ports or the US and UK and currently passing through the Red Sea, instead diverting around southern Africa.

Ships destined for major global economies are diverting away from the Red Sea

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