“These figures are unlikely to ease stagflation fears given that February’s surprisingly strong growth has been pushed firmly into the rear-view mirror by the renewed energy and supply chain shocks caused by the Middle East conflict.
“February’s growth will have been followed by a more miserable March with skyrocketing fuel prices and supply chain chaos sparked by the Iran war likely to have stalled economic activity, despite an early Easter boost to sectors like retail.
“Even if a peace deal is reached soon, a severe spell of stagflation looks locked in with surging energy costs expected to trigger sizable falls in investment and consumer spending, likely leaving growth weaker than many – including the IMF –expect.
“Though the Iran war has shifted policymakers’ focus more towards interest rate rises than reductions, a prolonged policy pause remains most likely, particularly as the likely squeeze on growth from the conflict should help dampen inflation over time.”
ENDS
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* includes parent companies. Source: ICAEW member data March 2025, Interbrand, Best Global Brands 2024.
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