The Red Sea crisis has had a real impact on countries in Europe. Photo/Reuters
LONDON – Weeks of attacks by struggle groups Houthi Iran-backed attacks on ships in the Red Sea have disrupted shipping in the Suez Canal, the fastest sea route between Asia and Europe that carries 12% of global container traffic.
For the European economy, which has weathered a mild recession in its bid to escape high inflation, a prolonged disruption would be a new risk to its economic outlook and could derail the central bank’s plans to start cutting interest rates this year.
5 Impacts of the Red Sea Crisis on Europe
1. Commodity Delivery Takes Longer
Photo/Reuters
According to Reuters, macroeconomically, it is small to negligible. Although the German Economy Ministry emphasized that it was monitoring the situation, this week it said that the only real impact on production so far had been a few cases of extended delivery times.
Bank of England chief Andrew Bailey agreed, and told a parliamentary hearing that it had “not really had the impact that I feared”, but acknowledged that uncertainty was still real.
2. Increased Inflation
Photo/Reuters
2024-01-21 13:20:20
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