UK economy faces recession if strait of Hormuz remains closed, EY warns - business live

Context

Rolling coverage of the latest economic and financial news The warning from EY follows comments from the new chancellor, John Healey, that the government is standing by to prevent the public from “being taken for a ride at the pump or the till” as the Iran war continues to hit prices. While he said there had been “no significant evidence of so-called price gouging” during the crisis, he used a weekend column to tell the big retailers that ministers were “watching closely” for any signs of profiteering. The conflict affects our national security, our UK bases, personnel and allies in the Middle East. But it also threatens our economic security: impacting the family finances of millions of British people. And I know that many British businesses have been put under pressure by increasing costs too. Conflict and uncertainty increases inflation, threatens growth and pushes up costs for businesses and governments alike.” Ongoing disruption to global energy markets will now start to test this economic resilience. If the strait of Hormuz reopens in the coming months, we expect the UK to avoid a more pronounced downturn, but an extended closure into 2027 would raise inflation and could push the economy into contraction next year. As growth becomes harder to sustain, the UK is likely to rely increasingly on those sectors that have underpinned economic performance in recent years, particularly technology and high-value business services. At the same time, longstanding pressures in construction remain a concern. Rising project costs, persistent labour shortages and weak productivity growth risk constraining the delivery of major infrastructure projects at a time when demand remains high. Enhancing productivity in the sector will be critical if the UK is to deliver its infrastructure ambitions while supporting broader economic growth.” Based on this request, I have agreed, for the future benefit of the WORLD and, likewise, the survival of a successful and prosperous Iran, to cancel the attack, subject to being able to rapidly make a DEAL.” 9am BST: Eurozone manufacturing PMI 9.30am BST: UK manufacturing PMI 3pm BST: US manufacturing PMI Continue reading...

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Not investment advice · for informational purposes only. Generated 3 Aug, 06:42 UTC