Washington and London probably envisage a scenario much like 1991: a quick, successful campaign. The longer the war goes on, however, the greater the risk of a serious oil shock and greater costs. These would widen the US twin deficits on fiscal and current accounts and probably precipitate a sharp fall in the dollar and painful adjustment, including a recession. This downturn would be transmitted to the rest of the world, including Britain. Even if Saddam is defeated, he may still have a nasty – economic – sting in his tail.