Stories

Wed, 12 Aug 2026

Wed, 12 Aug 2026 Burnham warned Iran war could hit UK growth next year

The conflict in the Middle East has pushed up oil and fuel prices, and also disrupted supply chains.

* Internal modelling suggests GDP growth would be severely impacted by ongoing conflict and supply chain disruptions.
* UK economy saw strong start to year but faltered due to Middle East conflict affecting businesses and pushing up oil and fuel prices.
* Economists expect growth of 0.4% between April and June this year, down from previous estimates.
* Worst-case scenario modelling suggests inflation would peak at 4.3% in first three months of next year, higher than current rate of 2.6%.
* Prime Minister Andy Burnham and Chancellor John Healey face pressure to use upcoming Budget to ease financial burden on households and businesses.
* Burnham has announced policies to tackle cost of living but hinted at further support, with Healey promising "strong fiscal discipline" in the Budget.
* Government will stick to party's 2024 manifesto pledges not to increase income tax, VAT or National Insurance contributions.