Via a Capital Economics note on how Middle East turmoil, specifically the rerouting of ships away from the Red Sea, could impact inflation
- We expect the recent rise in oil prices to prove temporary, goods shortages should be avoided, and shipping costs do not look set to surge
- Even if shipping disruption did cause a significant increase in firms’ input costs, soft demand and replenished stocks have weakened their pricing power to pass them onto end consumers
- production of commodities won’t be affected
- The materials will arrive, they will just take longer to get there
