UK Faces Major Economic Impact from Iran War, OECD Reports

• •UK's economic growth forecast cut to 0.7%, the lowest among G20 nations.
• •Inflation in the UK projected to hit 4% due to rising energy prices from the Iran conflict.
• •Prolonged high energy prices could lead to increased consumer costs and dampened economic growth.

The UK is projected to experience the largest economic downturn among G20 nations due to the ongoing Iran war, with the OECD downgrading its growth forecast to 0.7% for 2026, down from 1.2%. This decline is attributed to rising energy prices, particularly gas, as the UK is a significant energy importer. The conflict has disrupted supply chains and caused inflation to rise sharply, with UK inflation now expected to reach 4% this year. The OECD warns that prolonged high energy prices could dampen growth and lead to increased costs for consumers. The report highlights that only Italy is expected to have weaker growth among G7 countries. The Chancellor of the Exchequer has acknowledged the impact of the war but maintains confidence in the government's economic plan. Shadow ministers criticize the government's handling of the economy, attributing vulnerabilities to current policies. The OECD's global growth forecast remains unchanged at 2.9%, but inflation across G20 countries is expected to rise significantly.