UK Economy at Risk of Recession if Strait of Hormuz Remains Closed

The UK economy is at risk of recession in 2027 if the Strait of Hormuz remains closed to shipping, according to an economic outlook by Ernst & Young (EY).

Under a worst-case scenario, where the strategic waterway remains blocked until early or mid-2027, the UK economy would grow by only 0.5 percent in 2026 before contracting by 0.2 percent in 2027.

The prolonged closure could also push inflation sharply higher, with EY forecasting consumer price growth could reach 6.4 percent by the end of 2026 as oil and energy costs surge.