The world runs on oil and 20% of it goes through the Straits of Hormuz.
When a key commoddity is in short supply or potential short supplier, those who trade it or buy it direct hurry to build up their supplies, against a shortage. More people competing to buy a diminished or potentially diminishing source of supply drives the price up. When oil prices go up so does the price of electricity and gas. Gas because it too will have its supply limited by the closed Strait, electricity because much of it is used to make electricity.
As I said the world runs on oil that means, as well as you and me, all the companies that make or do anything except lie in a corner and look at the sky, will be using energy, whether gas oil or electricity and that will cost them more, so they will need to put prices up, which leads to inflastion and if wages do not go up means that people have to cut their spending back to concentrate on buying essentials.
This means companies will do their best to keep price rises low to keep sales up, but profits will be lower and investors will be worried about whether companies will go bust, so they are less willing to buy shares and that means the prices of shares drop to try and attract them.
Share prices in the short term tend to fluctuate with Investor sentiment, the long term patter, is a better guide to the state of the economy.
Farage fails to report 5 million gift!
