FX.co ★ Strait of Hormuz closure threatens UK economic growth

The UK economy could slip into a recession in 2027 if the vital trade artery of the Strait of Hormuz remains closed to shipping until early or mid-2027. According to a forecast from consulting firm EY, cited by the Independent, such an adverse scenario would cause UK GDP growth to slow to 0.5% in 2026, with the economy contracting by 0.2% in 2027.

A prolonged blockade of this strategic hydrocarbon supply route would trigger a sharp spike in oil and energy prices. EY analysts estimate that if shipping restrictions persist, inflation in the UK could soar to 6.4% by the end of 2026, placing additional financial pressure on consumers and businesses.

The latest escalation in the Middle East began on July 8 when US President Donald Trump announced the termination of a ceasefire agreement with Iran that was established on June 18. In response to a series of US military strikes, Tehran attacked US bases in the region, closed shipping traffic through the Strait of Hormuz, and accused Washington of violating the ceasefire memorandum.