economy
Iran war will spare no major economy, says OECD
The U.K. is predicted to be worse hit by the Iran war than its developed market counterparts, the OECD said in its interim economic outlook on Thursday.
TL;DR
- The U.K. is projected to face the greatest economic impact from the Iran war among developed nations.
- OECD revisions show U.K. inflation expected to hit 4% this year and growth to languish at 0.5% in 2026.
- The war has caused a surge in energy prices and disrupted global supply chains for commodities.
- The U.K.'s reliance on imported oil and gas, coupled with limited storage, makes it vulnerable to energy price shocks.
- Expectations of interest rate cuts by the Bank of England are now diminished, with potential for hikes.
- The British government is providing some support for those hit by energy price rises, but not through blanket measures.
- Finance Minister Rachel Reeves has stated that the government's fiscal rules remain 'ironclad'.