UK faces £35bn hit and risk of recession this year over impact of Iran war, thinktank warns
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The UK is projected to face a £35 billion economic downturn and the possibility of recession this year, largely due to the ongoing conflict in Iran, according to the National Institute of Economic and Social Research (Niesr). The thinktank indicates that even in a best-case scenario, growth will be significantly slower in 2026 and 2027. This situation poses additional challenges for Keir Starmer's government as it navigates the economic fallout from the Middle East crisis.
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The warning from Niesr comes amid rising tensions in the Middle East, which have historically had ripple effects on global economies. The UK's reliance on international trade and energy resources makes it particularly vulnerable to geopolitical conflicts. The economic forecast reflects broader concerns about inflation and growth rates in the wake of such instability.
This article reflects the views of the National Institute of Economic and Social Research and does not necessarily represent the views of The Guardian.
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