Faisal Islam

Calm prevails.

You can start to see a pathway where this ends in two or three or four weeks, maybe, with some spill on impacts on the economy that last a couple of months longer.

It's not great for the economy, a bump in inflation, but not a massive energy shock like we saw in 2022.

However, as you say, two or three hours later, that's all changed.

There are tankers being seized.

You can see a pathway back up the escalatory sort of spiral.

And then this is what matters, right?

If it does last until summer, as the president of the World Bank told me last week, if it lasts till summer, then you have this really important factor, which is the lack of fertilizer and precursors for fertilizer, or even the cost of it doubling or trebling, which can effectively be the same thing.

If that hits sowing and planting season,

in the southern hemisphere, developing countries, the breadbaskets of the world, in terms of the mass of populations, that is what will ratchet up issues around food availability and food prices around the world, which are often globally priced.

Likewise, rather domestically for the UK, if this lasts till the summer, you will then see an impact, which we will have not seen now, because in fact, prices have been cut on typical domestic energy and gas bills.

Obviously, it's come through on heating oil already.

So the markets have gone... It's like some sort of Formula One race.

They've gone sort of full speed ahead from...

Yes, there's going to be two cuts.

The war starts.

They perceive it's going to impact upon the UK disproportionately.

And they then anticipate not just one rate rise, but four rate rise by the end of the year.

Then the Bank of England comes out, including in an interview with me last week, and sort of says, well, no, hang on.

We all got way ahead of yourselves.