Prolonged Iran war could tip UK into recession next year, report warns

Oil prices have rocketed above 100 US dollars a barrel for the first time in nearly four years as the escalating conflict in Iran sparks a mounting crude supply crisis. (Alamy/PA) - (Alamy/PA)

Britain’s economy could be sent into a recession next year if the crucial Strait of Hormuz remains closed into 2027 amid a prolonged Iran war, according to a report.

The latest EY economic outlook warned that gross domestic product (GDP) could slow sharply to 0.5% this year and contract by 0.2% next year if the Middle East conflict is not resolved and the vital waterway – through which a fifth of the world’s oil and gas is normally carried – remains shut until early or mid-2027.