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The Economic Times

Top News / The Economic Times

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UK recession fears grow if Hormuz remains closed, forecaster warns

Britain's economy may shrink in 2027 if the Strait of Hormuz closure continues. Forecasters predict a 0.2% contraction if the waterway remains shut until mid-2027. This scenario would also increase inflation to 6.4% by the end of 2026. However, reopening the strait by September improves this year's forecast to 0.8%. EY expects interest rates to be cut next year after holding them steady.

3 Aug 2026 8:07 am