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London 17 Jan 2024:
On 11 January, the US (Aaa negative) and UK (Aa3 stable) began strikes on Yemen’s Houthi rebels following attacks on commercial shipping through the Bab al Mandab strait.
While not its baseline expectation, Moody’s says that risks of a miscalculation triggering an escalation into a multifront military conflict across the broader Middle East region, with significant global implications, have increased. Continued disruption of trade through the Red Sea will increase transport and logistics costs. Moody’s expects this to hurt businesses – or consumers if the higher costs are passed through – especially in Europe, and to exacerbate external financing difficulties for Egypt (Caa1 stable).
