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The UK's manufacturing sector has been hit by the sharpest rise in cost inflation since Black Wednesday in 1992, as the conflict in the Middle East drives up oil prices and disrupts supply chains. According to the Purchasing Managers' Index (PMI), cost inflation in manufacturing jumped to its highest level since October 2022, marking the largest month-on-month change since 1992.The rapid increases in costs mainly relate to fuel, transportation, and energy-intensive raw materials. The composite PMI index, covering services and manufacturing, stood at 51, suggesting the economy is still expanding, but at a sharply slower pace than the 53.7 seen in February.Chris Williamson, chief business economist at S&P; Global Market Intelligence, said: "Output growth across manufacturing and services has slowed to a crawl as companies blamed lost business directly on the events in the Middle East, whether through heightened risk aversion among customers, surging price pressures, higher interest rates, or via travel and supply chain disruptions."The CBI's survey of the retail sector also showed the fastest annual decline in sales volumes since April 2020, with the balance of retailers reporting rising sales at -52% in March, down from -43% in February.Martin Sartorius, lead economist at the CBI, said: "Retailers report that weak economic conditions continue to weigh on household spending, with subdued activity also evident across the broader distribution sector."Emily Sawicz, a director and industrials senior analyst at RSM UK, said: "Despite some resilience, geopolitical tensions remain a key concern for UK manufacturers – underscoring that conditions remain highly uncertain. The recovery many hoped to see take hold in 2026 now appears likely to be delayed at best, as rising energy costs and persistent inflation risks threaten to slow momentum."

The conflict in Iran has sparked concerns about a potential global food crisis due to a looming shortage of fertiliser, a crucial component in food production. The Strait of Hormuz, a vital shipping route, has been disrupted, impacting the export of fertilisers from Gulf countries.On March 2, Ebrahim Jabari, a senior adviser to the commander-in-chief of Iran's Islamic Revolutionary Guard Corps (IRGC), announced that the Strait of Hormuz was 'closed', causing oil prices to soar above $100 per barrel. However, experts warn that a parallel crisis is emerging - a considerable threat to global food security due to a shortage of fertiliser.Nearly half of the world's traded urea, the most widely used fertiliser, and large volumes of other fertilisers are exported from Gulf countries via the Strait of Hormuz. Recent disruptions to gas supplies and shipping have already forced fertiliser plants in the Gulf and beyond to shut or cut their output.Countries such as India, Brazil, and China are heavily dependent on Gulf fertiliser exports, with India sourcing over 40% of its urea and phosphate fertilisers from the region. A prolonged fertiliser shortage and hike in fertiliser prices could lead to reduced crop yields, affecting food security worldwide.The urea export prices from the Middle East have surged by about 40%, rising from just less than $500 to a little more than $700 per metric tonne. The price is currently close to 60% higher than this time last year.According to one shipping services company, 20% of the world's fertiliser originates in the Gulf, while 46% of global urea supply comes from the Gulf. Qatar Fertiliser Company (QAFCO), considered the world's largest urea supplier, alone supplies 14% of the world's urea.Analysis by Kpler, a data and analytics company, shows that as much as one-third of global fertiliser trade could be disrupted if the closure of the Strait of Hormuz persists. This could lead to nitrogen fertiliser prices doubling and phosphate prices climbing by about 50%.

A cooking gas crisis in India has forced a mass exodus of workers from the country's vital textile industry, according to reports. The shortage of LPG (liquefied petroleum gas) has created significant disruptions to both household needs and industrial operations.The textile sector, which employs millions of workers across India, has been particularly hard hit as workers have been compelled to leave their jobs and return to rural areas in search of alternative cooking fuel sources. This mass migration represents a serious challenge to India's manufacturing economy and could have long-term implications for the country's industrial output.While the full extent of the crisis remains unclear, industry experts warn that the prolonged energy shortage could lead to further production shutdowns and economic instability in regions heavily dependent on textile manufacturing.

Oil prices have experienced a significant surge, rising more than 5%, in the wake of an Israeli strike on Iran's South Pars gasfield. This development comes as the United States-Israeli conflict with Iran continues to escalate.The international standard, Brent crude, rose 5 percent to $108.66 a barrel on Wednesday. Meanwhile, US West Texas Intermediate crude (CLc1), the price barometer for US oil, gained 2.5 percent to $98.65. This widened its discount to Brent to the largest since May 2019, driven by fears of a prolonged conflict.Iranian state media reported that natural gas facilities associated with its offshore South Pars field – the largest gasfield in the world, located off the coast of southern Iran's Bushehr province – were attacked. Iran's Revolutionary Guard threatened to attack oil and gas infrastructure in Qatar, Saudi Arabia, and the United Arab Emirates, heightening the risk of further disruptions to energy supplies in the region.Later on Wednesday, Qatari authorities reported a fire at the country's Ras Laffan gas facility after an Iranian ballistic missile attack. Qatar's Interior Ministry later confirmed that the fire had been brought under control.The US-Israeli war on Iran and Tehran's retaliatory attacks on Gulf neighbours have disrupted oil and natural gas exports from the Middle East and forced production stoppages. Experts warn that if these disruptions keep oil and gas prices elevated for an extended period, the global economy could experience a wave of inflation.Fighting has halted most shipments via the Strait of Hormuz, through which 20 percent of global oil and liquified natural gas supplies pass. Total oil output cuts in the Middle East are estimated at 7 million to 10 million barrels per day or 7 percent to 10 percent of global demand.

Muslim communities around the globe observed Eid al-Fitr on Friday, signifying the conclusion of the sacred month of Ramadan, during which devotees abstain from food and drink from dawn till dusk. The culmination of Ramadan is marked by the sighting of the new moon, heralding the onset of Shawwal. However, variations in moon sighting practices lead to discrepancies in the timing of Eid celebrations across different countries. In several nations, including Mali, Niger, and Afghanistan, Eid al-Fitr was observed on Thursday, whereas in the Middle East, Africa, and Southeast Asia, it was celebrated on Friday. This joyous occasion, which extends over two days, is distinct from Eid al-Adha, which occurs during the Hajj pilgrimage. Traditionally, Eid al-Fitr commences with congregational prayers in open spaces, providing an opportunity for families and friends to unite for collective prayers and festivities. The celebrations this year are overshadowed by conflicts and instability in numerous Muslim-majority countries. In Iran, the ongoing war has resulted in widespread disruptions, while regions in the Gulf have experienced repercussions from escalating tensions. The United Nations reported that over one million people have been displaced in Lebanon due to Israeli attacks. Furthermore, Sudan has evolved into the world's largest humanitarian crisis as the conflict enters its third year.

Oil prices are continuing to rise as markets see no end in sight to the effective closure of the Strait of Hormuz. The critical waterway, which usually transports about one-fifth of the global oil supply, has been brought to a standstill by Iran in retaliation for US and Israeli strikes on the country.Brent crude, the most important benchmark for global prices, rose as much as 3 percent on Sunday to top $106 a barrel, before easing slightly early on Monday to $104.63 a barrel, up nearly 1.5 percent. This represents a more than 40 percent increase in global oil prices since the start of the war.US President Donald Trump has called on other countries to help Washington reopen the Strait, but his proposal has received a muted response. None of the countries he appealed to by name – including China, Japan, France, and the UK – have publicly committed to deploying their navies to secure the strait. Japan and Australia have both stated they have no plans to send ships to the critical waterway.The closure of the strait has resulted in what the International Energy Agency has called the largest disruption to global energy supplies in history. According to the United Kingdom Maritime Trade Operations (UKMTO) centre, no more than five ships have passed through the strait each day since the start of the war, compared with a historical average of 138 daily transits. At least 16 commercial vessels have been attacked in the region since the war began on February 28.Trump has repeatedly stated he is willing to deploy the US Navy to escort commercial shipping through the strait if necessary. However, Trump administration officials have said that warships will not be deployed to the waterway until Tehran's military capacity has been further degraded.

The economic fallout of the US and Israel's war with Iran is being felt across the globe, with Gulf economies suffering some of the worst damage. Iran has launched continuous attacks on Gulf states since the onset of the conflict on February 28, arguing that it is targeting military bases used by the US for the war.Gulf nations have rejected Tehran's claims, insisting the attacks on them are unjustified. The Iranian strikes have upended energy production and inflicted major disruptions to tourism and travel, putting the region at risk of some of the most severe economic harm since the 1990-1991 Gulf War.According to Khaled Almezaini, an associate professor of politics and international relations at Zayed University in Dubai, the region is likely losing hundreds of millions of dollars per day in economic activity due to disruptions to aviation, tourism, shipping routes, and energy exports.Middle Eastern oil producers' daily output declined from 21 million barrels to 14 million barrels after a little more than a week of conflict, according to Rystad Energy. Output is expected to drop substantially further if commercial shipping continues to avoid the Strait of Hormuz due to Tehran's threats.Goldman Sachs estimated that Qatar and Kuwait could see their GDPs plunge 14% if the war lasts until the end of April, with the UAE and Saudi Arabia facing contractions of 5% and 3%, respectively. Meanwhile, S&P; Global Ratings has affirmed a 'stable outlook' for Qatar, citing the country's large financial buffers.The war has also spilled over into other critical sectors, particularly tourism and travel, which accounts for about 11% of the GCC's GDP. Airspace closures and restrictions led to 37,000 flight cancellations from February 28 to March 8 alone.In an analysis published last week, the World Travel & Tourism Council estimated that the conflict was costing the region $600m in daily spending by international visitors. The economic fallout could be comparable to historic regional crises if the war drags on.

Iran's Foreign Minister Abbas Araghchi has accused the United States and Israel of causing disruptions to shipping in the Strait of Hormuz, a vital waterway through which one-fifth of the world's oil shipments pass.In a phone conversation with UN Secretary-General Antonio Guterres, Araghchi called for an end to what he described as military aggression against Iran by the US and Israel. He emphasized that every country and international institution concerned with peace and security must condemn these actions.The situation in the Strait of Hormuz has led to significant increases in oil prices, with Brent crude up 2.5% to $105.70 on Monday, more than 40% higher than before the conflict began on February 28.Several countries are reportedly in talks with Iran to secure safe passage for their ships. A senior adviser to Iran's Islamic Revolutionary Guard Corps (IRGC) had announced on March 2 that the strait was effectively 'closed' and threatened to set transiting ships 'ablaze'.US President Donald Trump has proposed a naval coalition to secure the Strait of Hormuz, but so far, no countries have pledged to join. French President Emmanuel Macron has stated that France will not participate in operations to unblock the strait, but may consider joining an escort system once fighting ends.The European Union is seeking diplomatic solutions to guarantee safe transit through the Strait of Hormuz and mitigate the impact of soaring energy prices on global markets.

The conflict in the region has intensified, with Iraq becoming a two-way battlefield between armed factions and the United States during its war with Iran. The US carried out strikes against the Shia paramilitary umbrella group, also known locally as Hashed al-Shaabi, late on Sunday after attacks on a US diplomatic and logistics centre at Baghdad International Airport.The attack was carried out after Iraqi security officials said four explosions were heard near Camp Victory, a US logistics centre at the capital’s main airport. No casualties were reported as the positions were deserted.The PMF is part of Iraq’s regular armed forces and includes some pro-Iranian groups. Pro-Iran armed groups have claimed responsibility for attacks on US interests in Iraq and across the region while strikes have also targeted these groups.Economic worries also are weighing heavily after Iraq’s Ministry of Oil last week announced a case of force majeure on all oilfields developed by foreign oil companies, citing disruptions to navigation through the Strait of Hormuz, which have halted most of the country’s crude exports.“Iraq relies on that revenue,” said Nicolas Haque, a reporter from Iraq’s capital. “That’s 90 percent of its revenues, so that’s going to have an impact on people.”US President Donald Trump on Saturday threatened to attack Iran’s power plants if freedom of navigation through the Strait of Hormuz was not fully restored in 48 hours. On Monday, hours before his deadline was to expire, Trump ⁠ordered the US ⁠military to postpone ⁠strikes ⁠against the power plants for five days.