In the context of total public spending of some £450bn that might not seem a lot, but it is money that has to be raised in taxation or, more likely, borrowed. Even if borrowed, there is an annual cost of £400m to service the additional debt. That has to be raised in tax.A second reason for concern is the increased likelihood of terrorist attacks in the developed world, were the Allies unable to demonstrate their desire to establish a decent regime in Baghdad Terrorism has two economic effects. It immediately stifles activity, and in the longer-term is a drag on the economy by adding to security and other costs. Money spent on counter-terrorist activities is money not spent on consumption.A third reason for concern is that war diverts attention of the government from other things, such as improving public services and making sure other government spending is being used wisely.

I think we suffer particularly because of the Blair “revolving lighthouse” effect. Civil servants complain that when his office gets interested in something, and you get his full attention, there is a flurry of activity. Then the revolving light swings on, his attention is elsewhere and nothing happens until months later it swings round again.Fourth, there could be considerable damage to international trade and investment were the French-German/US-UK split to remain.I don’t think one should take trade boycotts too seriously and I suspect that Americans will keep buying BMWs, even if they cut back on the Bordeaux. But this is not good for the great engine of global growth – international investment. It would at the margin be more difficult for a French company to justify an investment in the US and vice versa after the spat of recent weeks. The dislike of the US in much of continental Europe is self-evidently politically disturbing, but it is likely also to be disruptive in economic terms too.And finally, crucially, there is this issue of consumer confidence.

This war comes at a bad time – well, of course there could never be a good time, but it is bad in the sense that it hits a world economy that is already struggling to climb out of recession. It is struggling because a lot of the harsh adjustments needed to achieve sustainable balanced growth have yet to be made.The US and UK have to rely less on borrowed money to sustain demand; continental Europe has to make structural changes within the straitjacket of a one-size-fits-all interest rate policy. As for Japan – well, Japan has to get some growth going somehow, which requires a whole string of unpopular reforms.Against this background, a swift and successful campaign followed by rapid humanitarian help would enable the process of adjustment to continue. Confidence would return and we would go on hauling ourselves out of the downturn. But things will be a slow slog, not a swift soar.If the conflict were to go badly wrong, on the other hand, then recovery is at best postponed and at worst derailed In the end, the world economy will of course recover But the waiting will not be fun
More from Hamish McRae. UNHAPPY ENDINGS It’s that time of the year again when the clocks get changed, when the first lambs appear, and when Dr Wordsmith turns up in the office again looking to do a quick job for ready cash, and no questions asked. It’s that time of the year again when the clocks get changed, when the first lambs appear, and when Dr Wordsmith turns up in the office again looking to do a quick job for ready cash, and no questions asked.
Well, we’re always pleased to see our regular linguistic expert, so let’s hope you’ve got plenty of questions for him today.