Warconomics- (25.03.03)

Wars are generally good for economies, provided they are in another country and don't last too long. So the chances are any action in Iraq will stabalise US and possibly UK economic growth. The effect on oil prices is probably overstated, given the effect that OPEC has had in stabalising prices at an (artificially?) high level over the past three years.

The biggest risk probably comes to the world economy. Diplomatic spats as between Britain and France do not usually have any economic effects. However if disagreements are not resolved and trade starts to become affected then the knock on effects can be much larger. In this case the stock markets of the world, one possible weather vane on world trade, started to move upwards in unison so appear to have discounted this possibility.