Hormuz Closure Threatens UK Economy with Recession and Inflation

The UK economy could be on the brink of recession due to a prolonged closure of the Strait of Hormuz, a critical maritime passage in the Middle East. According to The Daily Telegraph, a shutdown lasting through the spring of 2027 would contract the country's GDP by 0.2% that year.

This scenario would also see negative economic growth for the first two quarters of 2027, meeting the technical definition of a recession. Additionally, the report warns that an economic slowdown could drive inflation higher in the UK.

The Strait of Hormuz is a narrow waterway between Iran and Oman, through which approximately 20% of global oil supplies and around 25% of liquefied natural gas (LNG) exports pass. The country's former Chancellor Rachel Reeves recently revised the economic growth forecast for 2026 downward from 1.4% to 1.1%, while projecting a 1.6% growth rate in 2027.