• UK retail sales -0.9% in Setember (-0.3% expected)
• UK Gfk consumer confidence -30 in October (-20 expected)
• GBPUSD losing momentum near recent lows

UK consumers are reining in spending in the run-up to the festive season and the latest survey from Gfk suggests it’s not just the weather that’s driving it.

Retail sales fell 0.9% in September, far exceeding expectations of a 0.3% decline as unseasonably warm weather weighed on sales of Autumn clothing. While that’s not a new phenomenon, weather is often referenced in these reports, it also comes at a time when the cost of living pressures are being felt even though wages are now outpacing inflation.

Whether it is higher prices at the pump or supermarket, larger energy bills, or big increases in mortgages and rents, households are feeling the pressure and that’s not just being reflected in sales but surveys too.

The Gfk consumer confidence slipped back to -30 again and cost-of-living pressures were cited as a reason for that. While there is a view that decelerating inflation – which Governor Bailey indicated will fall sharply in October – could support consumer spending, I’m less convinced after such a long period of falling real wages and continued pressures from higher interest rates.

A double bottom forming?

The recovery earlier this month didn’t last long, with the price running into resistance around 1.2350, just shy of the 200/233-day simple moving average band.

GBPUSD Daily

Source – OANDA on Trading View

It’s now facing an interesting test of support as another rebound around these levels could potentially set up a double bottom following a substantial decline over the last few months.

The pair appears to be struggling to generate fresh momentum near the lows even as the dollar remains supported by higher US yields and the pound was briefly hit by the softer spending data. Another bounce may draw focus back to last weeks highs around 1.2337 which may represent the neckline of that double bottom.

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Global geopolitical tensions often play a pivotal role in shaping people’s perceptions of economic growth. Research shows concern about such issues can cause people and businesses to become more cautious about spending and investing, which can ultimately lead to economic recession.

The recent escalation of the Israel-Palestine conflict is no different. Investors around the world are worried about the repercussions of this war – particularly in light of an already bleak picture for global economic growth.

Hamas’s October 7 attack on southern Israel is the latest chapter of a cycle of violence that has been going on in this region for decades and, sadly, seems to have no end in sight. While the reasons behind these events are complex, the conflict’s potential immediate and long-term economic ramifications are easier to grasp.

After all, if the Russia-Ukraine war has taught us one thing, it’s that we should be mindful of the intricate interdependencies that shape the global economic and geopolitical landscape.

Read more: Ukraine and the financial markets: the winners and losers so far

How conflicts can affect the economy

Internal and inter-state conflicts often have a significant effect on stock market indices, exchange rates, and commodity prices – sometimes even sending prices higher in the lead-up to hostilities. The longer-term economic impact is typically more complicated to assess, however. The lasting effects of even seemingly dramatic events on investor behaviour can be hard to predict.

Conflicts in the Middle East tend to lead to spikes in oil prices – think of the OPEC oil embargo of 1973-1974, the Iranian revolution of 1978-1979, the Iran-Iraq War initiated in 1980, and the first Persian Gulf War in 1990-91. Since the region accounts for nearly a third of global oil supply, any instability can create market uncertainty based on concerns about interruptions to global oil supply.

This uncertainty is reflected in the risk premium in oil markets. This is the price paid for oil traded ahead of time in the futures markets versus the real-time price of oil. It reflects the profits that speculators expect to receive from buying and selling oil during a time of conflict, as well as the hedging needs of businesses that produce and consume oil and their concerns about supply and demand.

And so, the effect of the latest Israel-Hamas conflict on global financial markets will depend on the involvement of other major regional powers. If the conflict remains between Israel and Hamas, the effect will probably be limited and arguably exclusive to countries with direct trade exposure to Israel or Palestine.

But if the conflict spreads to major oil-producing nations in the region such as Iran, the global economy could face severe repercussions as energy costs for businesses and households could spike if supply is interrupted.

Higher energy prices would hamper central banks’ efforts to tame inflation pressures in most advanced and emerging economies. If this leads to a “higher for longer” monetary policy that keeps interest rates elevated, it would push up the cost of borrowing and refinancing by governments, companies and people.

History can offer some insights into how the impact on the global economy could unfold under these different scenarios. For instance, the 50-day war between Israel and Hamas in 2014, which killed 2,200 people, mostly civilians, had no significant effect on the global economy or financial markets.

Yet, when Israel and Hezbollah clashed in Lebanon in 2006, oil prices surged globally due to fears of a broader conflict in the Middle East.

What to expect this time

Unfortunately, there is another factor to consider at the moment. The escalation of the Israel-Palestine conflict has happened alongside the realignment of various global alliances. This slow creep of “deglobalisation” can be seen in a shift in trade policies in recent years.

Countries such as the US and UK are relocating economic activity including sourcing or manufacturing products from different countries out of concern about relying on suppliers in potentially hostile regions, as well as the impact of imports from low-wage countries on struggling local labour markets

At the moment, these shifts can also be seen in the reactions to the Hamas attack on Israel. A two-state solution) to the Israel/Palestine conflict was initially laid out by the United Nations in 1947 and reaffirmed in 1974, with almost unanimous support around the world.

But there has been some nuance in the international reactions to the attack. With most western countries quickly voicing support for Israel’s right to defend itself, while countries like China and Russia called for a ceasefire without taking a stance on Hamas.

This suggests that the issue of Israel-Palestine could tie in with the broader trend towards the new geopolitical divisions that were already starting to emerge before Hamas’s attack.

A prolonged conflict between Israel and Palestine, especially with the involvement of major regional powers, could further accelerate this global realignment and have detrimental consequences for global economic growth.

Read more: China-US tensions: how global trade began splitting into two blocs

Under these circumstances, investors are already bracing for increased financial volatility across the board – from stocks and government bonds to commodity markets. So-called safe-haven assets like gold are typically used as protection against overwhelming economic uncertainty. The price of gold has shot up following the latest escalation in the Israel-Palestine conflict.

Financial markets will continue to monitor the conflict between Israel and Hamas for signs of escalation. Anything that pushes oil prices up further will reignite fears of higher inflation.

Unfortunately, this is happening just as many countries were starting to see inflation slow again after two years of persistently high consumer prices.

Daniele Bianchi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Preparing a bowl of chicken soup for a loved one when they’re sick has been a common practice throughout the world for centuries. Today, generations from virtually every culture swear to the benefits of chicken soup. In the U.S., the dish is typically made with noodles, but different cultures prepare the soothing remedy their own way.

Chicken soup as a therapy can be traced back to 60 A.D. and Pedanius Dioscorides, an army surgeon who served under the Roman emperor Nero, and whose five-volume medical encyclopedia was consulted by early healers for more than a millennium. But the origins of chicken soup go back thousands of years earlier, to ancient China.

So, with cold and flu season in full swing, it’s worth asking: Is there any science to back the belief that it helps? Or does chicken soup serve as just a comforting placebo, that is, providing psychological benefit while we’re sick, without an actual therapeutic benefit?

As a registered dietitian and professor of dietetics and nutrition, I’m well aware of the appeal of chicken soup: the warmth of the broth and the rich, savory flavors of the chicken, vegetables and noodles. What gives the soup that distinctive taste is “umami” – the fifth category of taste sensations, along with sweet, salty, sour and bitter. It is often described as having a “meaty” taste.

Improved appetite, better digestion

All that makes sense, because amino acids are the building blocks of proteins, and the amino acid glutamate is found in foods with the umami taste. Not all umami foods are meat or poultry, however; cheese, mushrooms, miso and soy sauce have it too.

Studies show that taste, it turns out, is critical to the healing properties of chicken soup. When I see patients with upper respiratory illnesses, I notice many of them are suddenly eating less or not eating at all. This is because acute illnesses ignite an inflammatory response that can decrease your appetite. Not feeling like eating means you’re unlikely to get the nutrition you need, which is hardly an optimal recipe for immune health and recovery from illness.

But evidence suggests that the umami taste in chicken soup may help spur a bigger appetite. Participants in one study said they felt hungrier after their first taste of a soup with umami flavor added in by researchers.

Other studies say umami may also improve nutrient digestion. Once our brains sense umami through the taste receptors on our tongues, our bodies prime our digestive tracts to absorb protein more easily.

This can reduce gastrointestinal symptoms, which many people experience when they’re under the weather. Although most people don’t associate upper respiratory infections with gastrointestinal symptoms, research in children has found that the flu virus increased abdominal pain, nausea, vomiting and diarrhea symptoms.

May reduce inflammation and stuffy nose

Inflammation is part of the body’s natural response to injury or illness; inflammation occurs when white blood cells migrate to inflamed tissue to assist with healing. When this inflammatory process occurs in the upper airway, it results in common cold and flu symptoms, such as a stuffy or runny nose, sneezing, coughing and thickened mucus.

Conversely, lower white blood cell activity in the nasal passages can reduce inflammation. And interestingly, research shows that chicken soup can in fact lower the number of white blood cells traveling to inflamed tissues. It does this by directly inhibiting the ability of neutrophils, a type of white blood cell, to travel to the inflamed tissue.

Key ingredients

To truly understand the soothing and healing effects of chicken soup, it’s important to consider the soup’s ingredients. Not all chicken soups are packed with nutritious healing properties. For instance, the ultraprocessed canned versions of chicken soup, both with and without noodles, lack many of the antioxidants found in homemade versions. Most canned versions of chicken soup are nearly devoid of hearty vegetables.

The core nutrients in homemade versions of the soup are what set these varieties apart from canned versions. Chicken provides the body with a complete source of protein to combat infection. Vegetables supply a wide array of vitamins, minerals and antioxidants. If prepared the American way, noodles provide an easily digestible source of carbohydrate that your body uses for energy and recovery.

Even the warmth of chicken soup can help. Drinking the liquid and inhaling the vapors increase the temperature of nasal and respiratory passages, which loosens the thick mucus that often accompanies respiratory illnesses. Compared with hot water alone, studies show chicken soup is more effective at loosening mucus.

The herbs and spices sometimes used in chicken soup, such as pepper and garlic, also loosen mucus. The broth, which contains water and electrolytes, helps with rehydration.

So, to maximize the health benefits of chicken soup, I recommend a homemade variety, which can be prepared with carrots, celery, fresh garlic, herbs and spices, to name a few ingredients. But if you need a more convenient option, look at the ingredients and nutrition facts label, and choose soups with a variety of vegetables over an ultraprocessed, nutrient-depleted kind.

In short, the latest science suggests that chicken soup – though not an out-and-out cure for colds and flu – really helps with healing. Looks like Grandma was right again.

Colby Teeman does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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