Red Sea crisis could shatter hopes of economic recovery

World Bank warns of surging energy prices, slower growth and higher inflation as threat rises of disruption to global trade

A prolonged conflict in the Red Sea and escalating tensions across the Middle East risk having devastating effects on the global economy, reigniting inflation and disrupting energy supplies, some of the world’s leading economists warn this weekend.

Before a statement expected on Monday by Rishi Sunak in the House of Commons about UK and US airstrikes on Houthi sites in Yemen, economists at the World Bank say the crisis now threatens to feed through into higher interest rates, lower growth, persistent inflation and greater geopolitical uncertainty.