US EditionUK facing biggest economic hit from Iran war of any major country
The OECD forecasts UK growth at 0.7% in 2026, down 0.5 percentage points due to energy and fertilizer price shocks from Middle East conflict, with inflation rising to 4%.
- On Thursday, the Organisation of Economic Co-operation and Development cut its 2026 UK growth forecast to 0.7%, the sharpest downgrade among major economies, while raising inflation forecasts to 4%.
- Rising energy and commodity prices, driven by Middle East conflict and disrupted shipping through the Strait of Hormuz, prompted the revisions; the OECD warned prolonged instability could trigger "significant energy shortages."
- As an energy importer, the UK faces higher living costs than peers; clothing retailer Next warned it faces £15m in additional costs if the conflict lasts three months, potentially raising consumer prices.
- Chancellor Rachel Reeves stated the war is "not one that we started," while Shadow Chancellor Sir Mel Stride called the downgrade a "damning verdict" on the government's economic vulnerability.
- The OECD noted central banks must remain "vigilant" to keep inflation anchored, warning that sustained high fertiliser prices could further impact food costs and weigh on economic growth through 2027.
22 Articles
22 Articles
The war between the United States and Israel and Iran affects all the major economies of the world, but the UK is expected to bear the most powerful economic impact of the developed economies, according to the Organization for Economic Cooperation and Development (OECD).
OECD Drastically Cuts UK Growth Forecast and Sounds Alarm on Inflation Amid Escalating War Fears
The Organisation for Economic Co-operation and Development (OECD) has downgraded the United Kingdom’s economic growth forecast amid escalating concerns over geopolitical tensions. In its latest report, the OECD warned that fears stemming from ongoing conflicts could drive inflation rates higher, posing additional challenges to the UK’s economic recovery. This revision reflects mounting uncertainties as international [...]
OECD forecasts Iran hit to global economy
The war in Iran is set to weigh on global growth this year, the OECD forecast Thursday, knocking the world’s economy off a path of strong expansion. The global economy was set for stronger-than-expected growth before the conflict began, but the near-halt to energy shipments from the Gulf “could result in lower growth and higher inflation,” the organization’s chief said: Inflation in the US could reach more than 4%, according to the forecast. Bus…
UK will suffer biggest hit among large economies from Iran war, OECD says
The UK will suffer a bigger economic hit from the Iran war than any other Group of Seven (G7) nation this year as growth weakens, inflation accelerates and interest-rate cuts are abandoned, the Organisation for Economic Cooperation and Development (OECD) warned.
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