EY has issued a warning that the UK economy could enter a recession next year if the Strait of Hormuz remains closed. The consultancy forecasts GDP growth could slow to 0.5% this year and contract by 0.2% next year if the conflict persists, impacting global energy markets and inflation. The UK government is monitoring prices closely to prevent potential profiteering amid rising costs.
As the situation unfolds, sectors like technology and high-value business services may become increasingly vital for economic resilience. Meanwhile, the Bank of England has indicated that further escalation in the region could push inflation above 4%, adding to the financial strain on households and businesses alike.