When US and Israeli forces launched airstrikes on Iran, the shock waves were felt far beyond the region. As the conflict escalates, understanding who benefits from this crisis might be as important as counting its costs.

The timing could hardly be worse for the UK economy. Official forecasts for GDP growth in 2026 had already been downgraded to 1.1% before a single missile was fired. Predictions that inflation might dip now look optimistic; and expectations of an interest rate cut on March 19 have fallen sharply.

The energy shock is immediate. Tanker traffic in the strait of Hormuz has fallen by around 90%. Qatar, the world’s second largest exporter of liquefied natural gas, halted production indefinitely. Although the UK sources little gas directly from the Gulf, energy markets are global so UK households could see more than £500 added to their annual bills.

Beyond energy, UK stocks have fallen, the pound has come under pressure and the UK government’s £23.6 billion fiscal headroom could erode rapidly.

For defence stocks, however, the picture is different. London-based BAE Systems surged around 6% on the first day of the conflict. And the American defence industry seems determined to quadruple production of some weapons.

Peace benefits ordinary citizens, small businesses, global supply chains and the planet’s climate trajectory. The beneficiaries of war are more concentrated.

One of the most uncomfortable truths about this conflict is that while it inflicts pain on some, it creates windfalls for others. In my co-authored research, we call this the “paradox of........

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