The World Economy Is Absorbing Another Supply Shock

Northern Trust /

02-06-2026

Northern Trust’s latest global outlook argues that the Iran conflict is evolving from a regional crisis into a broader structural shock for energy, inflation, debt markets, and global trade.

Economists increasingly expect disruptions in oil, fertilizer, plastics, jet fuel, and shipping supply chains to intensify over the coming months, with inflation likely rising more sharply than markets anticipate.
Sovereign borrowing costs have surged globally as bond markets price higher inflation and fiscal deterioration, placing particular stress on heavily indebted economies such as the UK.
The report also warns that deglobalization, trade fragmentation, and geopolitical rivalry are reducing the world economy’s ability to absorb shocks efficiently.

One of the report’s deeper conclusions is that the current conflict may permanently reshape global energy sourcing and supply-chain geography, even after the war itself ends.