Israel-Hamas war could plunge world into its biggest recession since the 1930s

Senior economists have warned that the Israel-Hamas war could plunge the world into its biggest recession since the 1930s.

Banking experts Larry Fink and Jamie Dimon claim the conflict on top of Russia’s invasion of Ukraine could flatten global trade.

They believe the uncertainty sparked by the bloodshed would send energy prices and food costs soaring and consumer confidence plunging.

Mr Fink, chief executive of BlackRock, the world’s biggest asset manager, said the trouble has created “a whole new future”.

He added: “When the Russian invasion occurred in Ukraine, we said that the peace dividend is over.

“Geopolitical risk is a major component in shaping all our lives. We are having rising fear throughout the world, and less hope.

“Rising fear creates a withdrawal from consumption or spending more. So fear creates recessions in the long run,.

“If we continue to have rising fear, the probability of a European recession grows and the probability of a US recession grows.”

Mr Dimon, who chairs America’s biggest bank, JP Morgan, called the consequences of war in the Middle-East and Eastern Europe “quite scary and unpredictable”.

He added: “Here in the US we continue to have a strong economy. We still have a lot of fiscal and monetary stimulus in the system.

“But these geopolitical matters are very serious – arguably the most serious since 1938.

“What’s happening on the geopolitical front right now is the most important thing for the future of the world – freedom, democracy, food, energy, immigration.”

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