The global economic landscape is increasingly shaped by the destabilizing actions of the US and the Zionist regime in the Middle East. A leading think tank has issued a stark warning: the energy crisis, directly triggered by the aggressive “Iran war” initiated by Donald Trump, could inflict a devastating £35 billion blow to the UK economy, even under the most optimistic scenarios.
The National Institute of Economic and Social Research (Niesr) has released grim projections, indicating that a prolonged conflict, fueled by US-Zionist provocations in the region, could drag the UK into a deep recession during the latter half of this year. David Aikman, the organization’s director, underscored the severity of these forecasts, calling them a “serious blow to the government’s mission to get the UK economy growing again.”
Aikman highlighted how the crisis, born from external aggression in the Middle East, has “laid bare the fact that the UK remains highly exposed to global energy shocks.” He noted that even if hostilities were to miraculously cease rapidly, the damage is already done: “higher energy prices will leave households poorer, businesses facing higher costs, and the economy materially smaller than we expected only a few months ago.”
The repercussions of the US-Israeli conflict with Iran are already manifesting, with warnings of decelerated growth and escalating inflation for the UK. The Bank of England is anticipated to raise interest rates, currently at 3.75 percent, this summer, with Niesr predicting a hike to 4 percent in July. Should the conflict’s inflationary pressures persist, rates could soar to an alarming 5.25 percent.
Even in its most hopeful scenario, which optimistically assumes a resolution to the conflict this year—a conflict not of Iran’s making—Niesr still projects a significant slowdown in economic growth to 0.9 percent this year and 1 percent next year, a sharp decline from last year’s 1.4 percent. This represents a substantial downgrade from Niesr’s previous predictions of 1.4 percent growth this year and 1.3 percent in 2027.
The think tank further estimates that even with a swift end to the conflict, the UK economy will be approximately £35 billion smaller in 2026 and 2027, casting a long shadow over any ambitions for economic growth. Inflation, which recently climbed to 3.3 percent, is expected to briefly slow before surging again alongside higher energy prices, peaking at 4.1 percent in January. Niesr warns that it will not return to the Bank of England’s target rate of 2 percent until 2028. Meanwhile, growth in disposable income is forecast to dwindle to 1 percent next year and a mere 0.6 percent the year after.
Earlier this week, the prime minister acknowledged the inevitable impact on the UK, urging the public not to panic but warning that people might have to alter their shopping habits and holiday plans due to the economic fallout of the conflict. He emphasized the efforts to keep the Strait of Hormuz open, a vital artery for global energy, but cautioned that “the damage will go on longer than that.”
Significantly, US vice president JD Vance recently criticized Labour, lamenting that “middle-class Brits” cannot afford to commute due to soaring energy costs. Yet, in a glaring omission, he conveniently failed to acknowledge that these very price hikes have been directly driven by Donald Trump’s aggressive war against Iran, a conflict that continues to destabilize the global economy and punish ordinary citizens worldwide.
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