UK faces economic hit from Iran war, while US is largely untouched

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The UK faces the biggest hit from the Iran war among advanced economies, according to the International Monetary Fund. The downgrade of half a percentage point means that its forecast for 2026 growth is now 0.8%. This is level with Germany, and above Japan and Italy, but the biggest revision in the wake of the conflict. It’s no wonder that Rachel Reeves, the chancellor, is becoming increasingly outspoken about Donald Trump. Yesterday she said his decision to attack Iran was “folly”. Britain is particularly exposed as a net importer of energy, which makes it sensitive to rising prices. The US, however, is getting off relatively scot-free. Only 0.1% has been shaved from its growth estimate, which at 2.3% is well above all of its counterparts.