In brief
US Treasury Secretary Scott Bessent stated that a "small bit of economic pain" is justified in the pursuit of long-term international security during the US-Israel war with Iran. He highlighted the risks posed by Iran's missile capabilities and nuclear ambitions, while the IMF warns of potential global recession due to rising energy prices.
US Treasury Secretary Scott Bessent has told the BBC a small bit of economic pain is worthwhile for long-term international security. As the International Monetary Fund (IMF) warned the US-Israel war with Iran could plunge the global economy into recession, Bessent said the conflict was to eliminate the threat of Iranian nuclear strikes on Western capitals. I wonder what the hit to global GDP would be if a nuclear weapon hit London... I am saying that I am less concerned about short-term forecasts, for long-term security, he said.At the start of the war, Iran had uranium enriched to 60%, according to senior US officials. It does not have nuclear weapons. The UK government has said there is no assessment that Iran is trying to target Europe with missiles. Bessent told the BBC he was less concerned about the economic hit than the risk Iran posed to global security. The biggest risk you can take is one you don't know you were taking. Now we know for a fact that, as the Iranians shot at Diego Garcia, they do have mid-range intercontinental ballistic missiles that could reach London, and we know that they want a nuclear programme, he said. He added that US and Israeli strikes had removed the tail risk of Iranian nuclear strikes against Western countries.In its World Economic Outlook report, the IMF said in a worst-case scenario—where oil, gas and food prices spike and remain high this year and next—global growth could fall below 2% in 2026. This would mean a close call for a global recession, which has only occurred four times since 1980, most recently during the Covid pandemic. Energy prices have soared since the war began more than six weeks ago after the key Strait of Hormuz shipping route effectively closed and peace talks between the US and Iran failed.
