"David Aikman, the Niesr director, stated that the Middle East conflict has exposed the UK's vulnerability to global energy shocks, indicating that even if hostilities ease, higher energy prices will leave households poorer and businesses facing increased costs."
"Niesr downgraded its growth forecasts for 2026 by 0.5 percentage points to 0.9% and by 0.3 percentage points for 2027 to 1%, reflecting a more pessimistic outlook due to the ongoing conflict."
"The report warned that if global oil prices hit $140 a barrel, the UK could face a significant inflation shock, risking a recession in the second half of the year."
The UK economy is projected to suffer a £35bn hit and face recession risks due to the Iran war, according to the National Institute of Economic and Social Research. Even in a best-case scenario, growth will be slower this year and next. Households will experience rising energy costs, prompting the government to consider a support package. The Niesr downgraded growth forecasts for 2026 and 2027, warning of a potential inflation shock if oil prices rise significantly, which could lead to a recession later this year.
Read at www.theguardian.com
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