EY warns the UK economy could tip into recession next year if the strait of Hormuz stays closed. The consultancy's latest outlook sets out sharply different growth paths depending on whether the waterway reopens.
EY has warned the UK could fall into recession next year if the strait of Hormuz remains closed. The consultancy's latest economic outlook says growth could slow sharply to 0.5% this year and contract by 0.2% next year if the conflict is not resolved and the waterway stays shut until early or mid-2027.
A fifth of the world's oil and gas normally moves through the strait, the outlook notes. If the waterway reopens by the end of the third quarter this year, however, EY's base case points to growth remaining fairly resilient at 0.9% in 2026 and 1.2% in 2027.
Peter Arnold, EY UK chief economist, said the economy has proved more resilient than expected this year. As a result, his team upgraded its growth forecast for the year from an 0.8% estimate made in May to 0.9%, though Arnold said uncertainty remains ahead.
Source: The Guardian
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