Economic experts warned of renewed fears of economic turmoil in Britain after the escalation of conflicts in the Middle East.
Last night’s drone strike on Hamas leaders in Beirut sparked an angry reaction across the Arab world, with Houthi rebels firing missiles towards commercial ships in the Red Sea.
British maritime security company Ambrey said that a Maltese-flagged container ship reported explosions fired towards an area near Yemen.
It contacted the Maritime Alliance for support.
Last night, the UK Maritime Trade Operations Organization (UKMTO) said it had received reports of three explosions in the Bab al-Mandeb Strait.
Wikimedia Commons
Ambrey said she learned that three missiles were launched from the direction of the Yemeni governorate of Taiz, according to what Reuters reported.
The UK Maritime Trade Operations (UKMTO) said last night it had received reports of three explosions in the Bab el-Mandeb Strait, a key checkpoint just 30km wide in the Red Sea.
Many shipping companies still avoid the Red Sea route and take the much longer African Cape of Good Hope route, adding about 5,000 miles and more than 9 days to their journeys.
The British Retail Consortium (BRC) warned that continued shipping disruptions could impact prices and availability of goods.
Its chief executive, Helen Dickinson, said that these blows to the economy could come “as a result of rising transport and freight insurance costs”.
“It will take longer to ship some goods,” she warned.
Economist Philip Pilkington told GB News: “This latest attack comes against the backdrop of the Maersk ship being hit by a missile last week, after which four small Houthi boats attempted to board it, and either sank or were chased by US helicopters.
“After that, most shipping companies announced that they would suspend transit through the Red Sea indefinitely.”
Pilkington added: “The problem with Operation Prosperity Guardian from the beginning was that while the US Navy and its partners could certainly provide some protection for commercial ships in the Red Sea, they could not be everywhere at once.
“Without comprehensive protection, it makes sense for commercial shipping companies to take the longer route. Unless something changes radically this will mean reduced shipments of oil and gas, container ships and bulk goods – especially to Europe and the UK.
“Another bout of inflation seems quite possible.”
Pilkington’s warning comes as regional Arab powers and terrorist groups issued aggressive statements after a surgical drone strike on Hamas leaders in Beirut.
Three Hamas leaders were reportedly killed in the Lebanese capital after Israeli missiles hit a residential building in the southern suburb.
The Israeli army did not respond to questions about its involvement in the assassination when contacted by this radio station.
Pilkington also issued a warning about current oil prices amid the Red Sea crisis.
Firefighters and civil defense personnel at a damaged building that was allegedly targeted by an Israeli drone strike on January 2, 2024 in Dahiya, a suburb of Beirut, Lebanon.
GT
“In effect, the markets, through aggressive short selling that has nothing to do with reality, are printing oil. This is very dangerous.
“First and foremost, it reduces the credibility of Western energy markets – and therefore petrodollars – at a key moment of geopolitical turmoil.”
He continued: “Secondly, this will lead to consumers overconsuming oil in the near term at artificially suppressed prices. When the basic supply facts inevitably become clear, the price of oil may decline, causing major economic disruptions.
Rising tensions in the Red Sea and warnings from economists threatened to sink Rishi Sunak’s pledge to halve inflation.
Of his five pledges, this is the only one that the Prime Minister and his allies have regularly defended.
But if these attacks on shipping continue, his pledge may soon be in tatters.