THE Iran conflict risks sparking a 2008-style crash, warned the Bank of England governor.
Andrew Bailey said stresses may be emerging in the £2trillion private credit market, where loans are provided by hedge funds or financiers.
The Iran conflict ‘risks sparking a 2008-style crash’, warns Bank of England governor Andrew BaileyCredit: AFP
Cars queues at a Costco petrol station in Manchester amid soaring fuel pricesCredit: LNP
Smoke rises from Beirut, Lebanon, following a strikeCredit: AFP
He warned it could spread, as it did with the sub-prime mortgage crisis, which triggered the financial catastrophe 18 years ago.
Mr Bailey, speaking as chairman of the Financial Stability Board, said the private credit sector is a “relatively opaque world”.
He added: “I’m not saying it will happen this time — it depends on how investors react and what they think they are getting.
“In terms of stress testing, these are the sorts of things we have to look for.”
The warning comes as the International Monetary Fund is set to downgrade forecasts for the .
Managing director Kristalina Georgieva said “scarring effects” caused by the ongoing conflict would mean slower growth.
Ahead of the spring meeting next week, she said: “Even our most hopeful scenario involves a growth downgrade.
“Even in a best case, there will be no neat and clean return to the status quo.”
Countries which rely on imported and will be hit hard, she added.
And in a warning shot to Chancellor , inset, she told governments they should “reject go-it-alone actions” such as exports or price controls.
She said: “That can further upset global conditions — don’t pour gasoline on the fire.”
Ms Reeves has said any support over price hikes will be targeted at those who need it.
The IMF also said it was looking at a £40billion bail-out for countries as a result of the
Chancellor Rachel Reeves has said any support over energy price hikes will be targeted at those who need itCredit: Reuters BLAIR OIL BID
By , Political Correspondent
LABOUR must back stalled North Sea oil and gas fields or leave Britain exposed to global shocks, the Tony Blair Institute has said.
The think tank said projects like Jackdaw and Rosebank, which Energy Secretary Ed Miliband is currently deciding on, should already be green lit after the Iran war showed the need for “strengthening domestic supply”.
PM Sir Keir Starmer said oil and gas will be “part of the mix” for years ahead, but the two sites must go through the planning process.
Eze Chidiebere Paul
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