The Foreign Office has finally bestirred itself to issue a formal warning to Iran, as the number of political executions climbs with grim regularity. The regime's latest innovation? Recording the 'last words' of the condemned dissidents.
One must admire the bureaucratic efficiency, if not the morality. This is not a spike in crime; this is a deliberate policy choice. For a regime facing mounting internal pressures from a restless population and an economy ravaged by sanctions, this is a signal.
It is a signal of weakness disguised as strength. The capital flight from Tehran to Dubai continues, and the rial's slide against the dollar is a more honest barometer of the regime's health than any Revolutionary Guard communique. The UK's warning, while welcome, is lost in the cacophony of gilt yield movements and the Bank of England's delicate dance with inflation.
The market has already priced in the moral hazard here: Tehran's actions are a variable, not a shock. The real question is whether the West will finally calibrate its response to match the severity of the data. In economics, we call this a mispricing of risk.
