The United States-Israel war with Iran will have a “significant impact” on the economy, a senior official has said, as Renfrewshire Council keeps a “watching brief” on changing household costs.
The domino effect of the conflict, which began at the end of last month, is being monitored by the local authority as concerns emerge about the effect it could have on recent “green shoots” of recovery.
The global picture was discussed by officers and elected members at the Fairer Renfrewshire sub-committee – a task force that focuses support for those affected by poverty and the cost-of-living crisis – on Wednesday.
Petrol and diesel, energy costs, inflation, food prices and mortgage rates are some of the areas that could be directly and indirectly influenced by the situation.
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Laura McIntyre, the council’s head of policy and partnerships, said at the meeting: “When the papers were initially drafted at the end of February, we were obviously in quite a different place prior to the conflict unfurling in the Middle East.
“At that point, there were increasingly some positive green shoots, certainly at a macro-economic level, and some hope that some of those might have started to positively impact households in Renfrewshire.
“That included things like the rate of inflation coming down at that point and quite importantly food inflation was part of that – although higher than overall inflation it was good to see that food inflation, which is having a considerable impact on households, was starting to come down.
“Also, it was anticipated that interest rates would continue to come down and positive developments in relation to the energy price cap etc, which would also have a positive impact when that comes in in April.
“However, the ongoing conflict has currently and will increasingly, as we go forward, have a significant impact on the economy and a direct impact.
“Obviously, the level of uncertainty in terms of what that means is what everyone is grappling at the moment.
“We’ve already seen increasing uncertainty in terms of energy markets. At initial level, that’s had an impact, as we’ve highlighted in the paper, in relation to prices at the pump in terms of filling up cars etc but that’s continued to develop even since the paper was prepared and submitted to members.”
Ms McIntyre later added it would be a “watching brief” for the local authority as it monitors the impact in the short and medium term as markets adjust and costs change for households.
SNP depute council leader Jacqueline Cameron, chair of the sub-committee, responded: “You’re right, Laura. We just get the green shoots, as you say, and then something else happens.
“It’s been a tough six years with Brexit, the global pandemic, Ukraine war and now we’ve got the Middle East as well … It’s not been an easy time for anyone but in local government we’ve had our crosses to bear as well.”
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