UK faces £35bn hit from Iran war, recession risk grows

Britain could lose £35bn and fall into recession this year as the Iran war damages its economy, a leading thinktank has warned. The National Institute of Economic and Social Research (Niesr) said even in a best-case scenario, the UK economy would grow much more slowly in 2026 and 2027 because of the Middle East conflict. The fallout adds fresh pressure on Prime Minister Keir Starmer’s government.