Iran War Could Slam UK Economy, Niesr Warns

0:00On April 28, a leading UK think tank, NES Air, just dropped a harsh warning, the Iran work had slammed the economy with a 35 billion pound hit, and dragged it into recession this year. Energy shocks from the conflict are piling on top of existing pressures for Keir Starmer's government. Even in their best case outlook, growth slows way down, with forecasts cut to 0.9% in 2026 and 1% in 20. Households and businesses face theiber energy bills that shrink wallets and profits across the board. Chancellor Rachel Reeves is eyeing targeted aid packages, stressing nothing is off the table, but a massive inflation spike in public finance gaps. Make every move tricky. NES's director calls it a serious setback to rebooting growth, exposing Britain's vulnerability to global oil chaos. In a nightmare scenario, oil hits $140 a barrel, pushing inflation past 5% and forcing the bank of England into its. Biggest rate hike in decades, 1.5 percentage points.

1:03Baseline expects a quarter point bump to 4% soon, as Brent crude sits at $111 now. Bond yields are climbing fast, with 10-year rates over 5%, and this could balloon government borrowing by nearly 24 billion pounds. By decades in, testing fiscal rules right before key elections. The road to recovery just got a lot bumpier.