UK Economy May Grow Just 0.3% Next Year Amid Ongoing Middle East Conflict

The UK economy may face a bleak future if the conflict in the Middle East continues. According to Treasury officials, the country's GDP could grow by as little as 0.3% next year if disruption to the Strait of Hormuz persists until the end of 2026.

This projection is based on internal modelling from the Treasury and represents a more extreme scenario. It comes amid a backdrop of modest growth in the UK economy, with the Office for National Statistics (ONS) expected to reveal that GDP saw no growth in June.

The conflict has driven energy prices higher since February and pressed down on consumer sentiment. The conflict also affects trade, which could impact the economy further.