Andy Burnham has been warned that the UK economy will grind to a halt if Donald Trump presses on with his war on Iran – just as repeated heatwaves hit output.
Treasury officials predict growth will slow to 0.3 per cent in 2027 if the Strait of Hormuz remains effectively closed for the rest of this year due to the conflict.
That would be the worst performance since 2023, when Britain was in the grip of a cost-of-living shock following Russia’s invasion of Ukraine, and well below the 1.6 per cent expansion that has been forecast by the Office for Budget Responsibility.
The internal forecast also warns inflation could rise from 2.6 per cent to 4.3 per cent in the first quarter of 2027, hitting living standards.
The Treasury briefing, reported by Bloomberg, came as Iran and the US remain at loggerheads over a permanent end to the war in the Gulf.
