The coming oil shock will hit unequally - policy must address inequality rather than chase growth
Source: https://www.theguardian.com/profile/adityachakrabortty. "A third inflationary shock in less than a decade is coming: who will pay the price this time around? | Aditya Chakrabortty | The Guardian." April 1, 2026. www.theguardian.com
The Gist
The author argues that a war-caused oil crisis is coming that will hurt poor people much more than rich people, just like previous crises did. Instead of trying to boost economic growth, the government should focus on policies that directly help struggling families through progressive pricing and targeted support.
Conclusion
The UK government must abandon growth-focused policies and instead implement progressive, inequality-addressing measures to handle the coming inflationary crisis caused by the US-Israel war on Iran
Premises
- The US-Israel war on Iran will cause a major oil supply shock by disrupting the Strait of Hormuz, which carries 20% of global oil supplies
- Cost of living crises affect people unequally - during 2019-2023, the poorest 20% spent 96% more on necessities while the richest 20% spent 45% less
- The current utility pricing system is regressive, making poor families pay the same rates as wealthy families for basic necessities
- Starmer's promise of 'highest sustained growth in the G7' has failed, with the UK now predicted to have the lowest G7 growth except Italy
- Growth-focused economic policies have proven ineffective at improving household prosperity for ordinary working people
Assumptions
- The US-Israel war on Iran will continue long enough to cause sustained economic disruption
- Past patterns of inequality during crises will repeat in the coming crisis
- Progressive utility pricing is politically and practically feasible to implement
- Economic growth does not automatically translate to improved living standards for most people
- Government intervention can effectively mitigate unequal impacts of economic shocks