This is Armchair Economics with Hamish McRae, a subscriber-only newsletter from The i Paper. If you’d like to get this direct to your inbox, every single week, you can sign up here.

This is Armchair Economics with Hamish McRae, a subscriber-only newsletter from The i Paper. If you’d like to get this direct to your inbox, every single week, you can sign up here.

You can measure the relief which met news of a ceasefire between the US and Iran by looking at the markets. The oil price has come down, shares have soared and, very importantly for all of us, the cost of borrowing for the Government has come down. But we are not back to normal, or what passed for normal before the attack on Iran. You can’t get the toothpaste back into the tube.

Here are five ways in which, in economic terms, the world will be different for all of us.

First, we will all be poorer – poorer, at least, than we otherwise would have been. This is because the disruption to the global supply chain will continue for a decade, maybe longer. The world has created a highly specialised and amazingly efficient economy, with goods and raw materials being transported huge distances from the lowest-cost producers. That is why 20 per cent of oil and gas passes through the Strait of Hormuz.

But efficiency comes at the cost of a lack of resilience. We know now, if we hadn’t fully appreciated it before, that it is wiser to pay more for security of supply. It is not simply because what has happened in the past few days has transformed the case for investing in our own oil and gas in the North Sea. We need as a country to spend more money in all sorts of ways to make us better able to cope with global turmoil. That........

© iNews