NEW YORK: Going to war with Iraq could blow economic recovery off course and cost Britain up to 230,000 jobs, according to research published on Friday.
With Republican gains in the US mid-term elections increasing the likelihood of military action, analysts at Experian Business Strategies say a war would send oil prices soaring and halt spending.
“In this ‘conflict’ scenario, the price of oil would rocket to nearly $40 a barrel from $25, leading to higher costs for trade and industry and further eroding company profitability,” says research director Neil Blake.
“Consumers would cut back on spending, and firms would scale back their investment plans. Result: Reduced output growth and layoffs right across the manufacturing and the private services industries.”
The warning was underlined by BA chief executive Rod Eddington, who told US investors that war could force the airline to step up its restructuring programme, already taking out 13,000 jobs.
“We would try to make a rapid judgment and adjust capacity instantly and adjust the cost base, too. We demonstrated we could move pretty quickly after September 11 and if necessary will respond again.”
President Bush’s treasury team argues that toppling Saddam Hussein would benefit the global economy by opening up Iraq’s oil supplies, but the Federal Reserve cited “geopolitical risks” on Wednesday as one reason for its interest rate cut.—Dawn/The Guardian News Service.
