EY Warns UK Could Contract 0.2% if Hormuz Stays Shut Until 2027
Updated
Updated · The Guardian · Aug 3
EY Warns UK Could Contract 0.2% if Hormuz Stays Shut Until 2027
3 articles · Updated · The Guardian · Aug 3
Summary
EY said a prolonged Strait of Hormuz closure could push the UK into recession, with GDP slowing to 0.5% this year and shrinking 0.2% next year.
A fifth of global oil and gas normally passes through the waterway, and EY said disruption lasting until early or mid-2027 would sharply weaken growth.
If the strait reopens by the end of the third quarter, EY's base case sees UK growth holding at 0.9% in 2026 and 1.2% in 2027; it also lifted this year's forecast to 0.9% from 0.8%.
Brent crude fell about 5% to $83.49 a barrel after Donald Trump said he had canceled planned strikes on Iran while expecting a nuclear deal and full reopening of the strait.
EY said the UK will increasingly depend on technology and high-value business services to sustain growth, while construction faces persistent cost, labor and productivity pressures.