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Recession risk if Strait of Hormuz stays closed until next year
Jump to contentThank you for registeringPlease refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged inAllNewsSportCultureLifestyleEY's latest economic outlook warns that Britain's economy could enter a recession next year if the crucial Strait of Hormuz remains closed until early or mid-2027. Under this adverse scenario, GDP could grow by just 0.5 per cent this year and contract by 0.2 per cent next year, with inflation potentially soaring to 6.4 per cent by the end of 2026. Conversely, if the Strait of Hormuz reopens by the end of the third quarter of this year, EY's base case forecasts resilient growth, upgrading the 2026 outlook to 0.9 per cent expansion. The report also anticipates interest rates remaining at 3.75 per cent until late 2026, with two cuts expected in April and July 2027, bringing the rate to 3.25 per cent by the end of 2027. Peter Arnold, EY UK chief economist, highlighted the UK economy's unexpected resilience but cautioned that prolonged disruption to global energy markets would test this strength. In fullUK ‘at risk of recession’ if Strait of Hormuz remains closed into 2027More bulletinsThank you for registeringPlease refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in
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independent.co.uk
Prolonged Iran war could tip UK into recession next year, report warns
The EY economic outlook cautions that GDP could slow to 0.5% this year and contract by 0.2% next year if the Strait of Hormuz remains shut into 2027.
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UK ‘at risk of recession’ if Strait of Hormuz remains closed into 2027
EY’s latest economic outlook also warns that inflation could rise to 6.4% as oil and gas prices soar
