UK Treasury warns: Iran war may cause economic growth to slump to 0.3%, with rising inflation
智通财经2026/08/12 22:46- A UK Treasury official has issued an internal warning stating that if the Strait of Hormuz remains closed for the rest of the year due to US-Iran tensions, UK economic growth could slow significantly to just 0.3% by 2027. This would be the worst economic performance since 2023, far below the previously forecast 1.6% growth by the Office for Budget Responsibility.
- Internal forecasts also indicate that, affected by energy price transmission, UK inflation could rise from its current 2.6% to 4.3% in the first quarter of 2027, delivering a new blow to household living standards. The US and Iran remain deadlocked over ending the Gulf conflict, with shipping through the Strait of Hormuz continually disrupted.
- The economic slowdown will directly squeeze the UK's public finances. A decrease in tax revenues combined with increased welfare expenditures could create a new fiscal gap in the already strained October budget, while also weakening the government's ability to support households with cost-of-living measures.
- Previous official data showed that UK economic growth had already slowed in the second quarter, with output stagnating at one point in June. Meanwhile, sustained heatwaves are causing additional damage to productivity, high street sales, and agricultural yields, with economists estimating heat-related losses for the UK economy of around £3 billion to £4.4 billion.
- Due to the Strait of Hormuz disruption, international oil prices have remained near $90 per barrel. The International Energy Agency has warned that global oil inventories are “rapidly decreasing” as a result of the conflict.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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