Food inflation could reach 7% by the end of the year, the Bank of England has warned, in a stark illustration of Britain’s vulnerability to geopolitical shocks that cascade from the Gulf through energy markets, fertiliser costs and supermarket prices into falling household incomes, weak growth and job losses. The warning, delivered this week, crystallises a deeper structural problem: a system in which efficiency has been so relentlessly prioritised over resilience that the country now finds itself with virtually no buffer against disruption.
Economic exposure and the cost of efficiency
The Bank has made clear that interest rate rises cannot move global energy prices. Rate hikes, it argues, merely redistribute the impact by compressing wages and deterring investment, preventing higher costs from becoming embedded. What looks like inflation is, in the Bank’s analysis, the price of dependence on the Strait of Hormuz. Britain’s stability, the institution implies, rests on a security guarantee the country has yet to build into its infrastructure.
The UK is not a weak economy, but it is dangerously exposed. Its key sectors — finance, energy, data and food — are tightly bound together and run on thin margins. The logic of efficiency has crowded out resilience. Fertiliser is a case in point: a critical agricultural input with no domestic reserves, because buffer stocks have long been treated as wasteful. Europe once invested in building resilience into its food system; the current crisis suggests it may need to do so again.
That system is reliant on a “just in time” model and low stock levels that do not encourage stockpiling beyond immediate needs, according to research into food supply chain vulnerabilities. Disruptions can arise from extreme weather, cyber-attacks, global conflicts or pandemics — and the volatile international context magnifies each risk. The Food & Drink Federation has forecast that food price rises could reach 9-10% in 2026, as businesses struggle to absorb the cost shock delivered by the war in Iran, alongside higher energy, transport and agricultural costs. Investment in food and drink manufacturing has not yet returned to pre-2022 levels, and labour and skills shortages in parts of the sector remain a risk.
Energy dependence reinforces the picture. The UK imports a significant proportion of its oil and gas, and although renewable generation is growing, the country remains heavily reliant on gas for electricity. Global gas prices continue to drive domestic costs, a vulnerability that was brutally exposed by Russia’s war in Ukraine and has only been sharpened by the present instability in the Middle East.
Digital infrastructure under siege
The more connected modern life becomes, the more vulnerable it is to forms of attack the public may not recognise as warfare. Security researchers demonstrated last year that a “poisoned” calendar invite could hijack Google’s Gemini AI chatbot to control lights, shutters and boilers in a home. In the hands of a hostile state, such exploits could bring Britain to a halt. National security, experts argue, now depends on the integrity of civilian digital infrastructure.
The scale of the threat is considerable. Almost 93% of UK critical infrastructure organisations reported a cyber incident in the past year, according to industry data, with attacks increasingly causing operational disruption across energy, finance, transport and government. The most serious cyber-attacks are now carried out by hostile nations — including Russia, Iran and China — and the UK faces around four “nationally significant” incidents per week, a figure that has more than doubled in recent years. Russia, in particular, has adapted tactics learned from military engagements in Ukraine to target critical infrastructure in the UK and Europe, including power plants and water supply systems. Hackers linked to Russian military intelligence have exploited weaknesses in routers to steal sensitive information.
Britain’s reliance on foreign-controlled digital infrastructure and overseas providers poses substantial risks. MPs have warned about the threat from service providers under the control of foreign governments, raising questions of “digital sovereignty”. Meanwhile, artificial intelligence is being used by attackers to scale phishing and malware campaigns, even as it is rapidly adopted for defensive operations — automating incident response and threat hunting.
This was part of the message delivered by Fiona Hill, one of the co-authors of the UK’s 2025 strategic defence review. In a recent speech, Hill warned that the public is already exposed to forms of war it does not recognise as such. The systems that sustain daily life — communications, healthcare — are vulnerable to hacking, subversion and economic coercion. Citizens, she argued, should be primed for “privation or participation” rather than trench warfare. The UK, she said, has “already experienced sabotage and cyber-attacks by Russia” and the homeland is “back on the pitch” as the rules-based order is dismantled by Donald Trump and the United States retreats from guaranteeing European security. A growing sentiment that the US is reorienting towards the Indo-Pacific is exposing structural weaknesses in Europe’s defence architecture and testing the continent’s ability to maintain deterrence without a strong transatlantic anchor.
Hill’s argument reflects a broader shift in the nature of conflict. Hybrid warfare — the co-ordinated use of military, political, economic, civilian and informational instruments of power — is designed to exploit national vulnerabilities across every societal function. The UK is reportedly preparing a public handbook, an update to its “War Book”, to advise families on preparing for sustained hybrid conflict, focusing on disruptions to food, energy and medicine supplies. The strategic defence review itself, led by Lord Robertson, General Sir Richard Barrons and Hill, has recommended increased defence spending — aiming for 2.5% of GDP by 2027 and 3% in the next parliamentary term — alongside investment in new munition factories and a “NATO First” readiness. Yet critics, including Lord Robertson, have voiced concern over what they describe as a “bizarre” lack of urgency in government planning and a “corrosive complacency” towards defence spending.
The missing political narrative
Instinctively, it feels better when butter is preferred over guns. But that choice may belong to an earlier age. In a world of hybrid warfare, the distinction between civilian welfare and national defence is rapidly eroding. The question is no longer whether to prioritise butter or guns, but how to defend the systems that make both possible.
Hill’s approach requires a political narrative that Britain currently lacks — one that links security to the economy and everyday life. Energy secretary Ed Miliband has come closest to developing one, advocating a shift towards clean energy to enhance security by reducing reliance on volatile global gas prices, accelerating electrification, promoting heat pumps and delinking gas and electricity prices. Yet UK politics remains largely focused on the cost of living, NHS waiting lists and immigration, not resilience or systemic risks. Without a shift, the policies Hill advocates risk appearing abstract or alarmist. That would make it harder to build public consent for the structural changes her speech implies.
