IoD press release  Growth was resilient as Iran conflict kicked off

“Economic growth for the first quarter came in at a fairly punchy 0.6%, buoyed by some recovery in consumer and business spending following a weak final quarter last year. But there were early reports of turnover in some sectors being negatively affected by the outbreak of conflict in the Middle East – including in manufacturing, wholesale and accommodation. These are some of the sectors most exposed to geopolitical risk, with high vulnerability to energy costs and often complex global supply chains. There were also some signs of stockpiling in a handful of sectors – we had already seen in retail sales data for March that fuel sales picked up. This activity may soften the initial impact from the crisis.

“As the conflict drags on, the government’s narrative in the King’s Speech rightly focussed on economic security, including sovereign capabilities in steel, improving infrastructure, market conditions and regulations. Energy security was rightly there too, although a plan to maximise the benefits from UK oil and gas fields remains worryingly absent. As energy costs rise, swift action is needed to address the other costs businesses face – reducing regulatory burdens and speeding up policy decisions can play a role in driving a more resilient economy.”