<\/p>\n
The Iran conflict is affecting the supply chain <\/p>\n
Rising energy costs prompted by the Iran conflict could see the UK \u201cflirt\u201d with a technical recession, according to a new forecast.<\/p>\n
No growth is expected in the second half of the year with inflation ticking up and growth flatlining.<\/p>\n
The EY Item Club says GDP growth will fall from 1.4% last year to 0.7% in 2026, and reaching only 0.9% next year.<\/p>\n
The impact of the squeeze on energy and the supply chain will see the UK\u2019s unemployment rate hit 5.8% in the middle of next year, with 250,000 losing their jobs, according to the forecaster.<\/p>\n
Its outlook follows renewed tensions in the Strait of Hormuz where President Trump said the US has intercepted and seized an Iran-flagged cargo ship.<\/p>\n
He said he would target Iran\u2019s bridges and power plants unless Iran agreed to the terms of a peacefire. Brent crude rose to just over $95 a barrel overnight. <\/p>\n
The Strait remained closed on Sunday, a day after the Islamic Revolution Guard Corps (IRGC) said it was ending a temporary reopening over the US blockade, which it said violated the terms of their ceasefire agreement. Iran said it would stay closed until the US ended its naval blockade.<\/p>\n
Matt Swannell, chief economic adviser to the Item Club, said: \u201cConsumers\u2019 spending power will be squeezed, while more expensive financing arrangements and a less certain global economic backdrop will pour cold water on companies\u2019 investment plans.\u201d<\/p>\n
Inflation could almost double the Bank of England\u2019s 2% target by the end of the year, although \u201ca repeat of 2022\u201d is not likely. However, the Bank\u2019s governor last week said there was no rush to raise interest rate.<\/p>\n
In separate research, EY said half of the 55 profit warnings from UK-listed businesses during the first quarter were largely attributed to geopolitical uncertainty, the highest proportion in more than 25 years of the firm\u2019s analysis.<\/p>\n
Warnings from the FTSE travel and leisure sector were at their highest for three and a half years, EY found.<\/p>\n
\t #flirt #recession #Iran #War #fallout #Daily #Business<\/p>\n","protected":false},"excerpt":{"rendered":"
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