{"id":332540,"date":"2026-10-29T06:00:54","date_gmt":"2026-10-29T06:00:54","guid":{"rendered":"https:\/\/www.thetruthseeker.co.uk\/?p=332540"},"modified":"2026-10-30T07:41:24","modified_gmt":"2026-10-30T07:41:24","slug":"uk-growth-downgraded-over-iran-war","status":"publish","type":"post","link":"https:\/\/www.thetruthseeker.co.uk\/?p=332540","title":{"rendered":"UK growth downgraded over Iran war"},"content":{"rendered":"

Melissa Lawford \u2013 The Telegraph Oct 28, 2026<\/strong><\/h1>\n

The UK\u2019s growth forecast for next year has been cut as war in the Middle East<\/a> hits households and businesses.<\/p>\n

National GDP will grow by 1pc in 2027, 0.5 percentage points less than the Government\u2019s fiscal watchdog forecast back in March.<\/p>\n

The Office for Budget Responsibility (OBR) blamed higher energy prices and inflation, which are putting pressure on household incomes.<\/p>\n

In its forecast, the OBR said: \u201cWe anticipate growth of around 1pc in 2027 \u2013 down about half a percentage point from March \u2013 as it takes time for higher global energy prices and increased interest rates to weigh on activity.\u201d<\/p>\n

The watchdog\u2019s March forecast was finalised just before Donald Trump\u2019s attack on Iran<\/a> on Feb 28, which sent oil prices soaring above $115 (\u00a391) per barrel.<\/p>\n

Since March, near-term pricing for oil and gas has climbed by 30pc and 80pc respectively, with significant implications for inflation and interest rates.<\/p>\n

The OBR now expects that inflation will peak at 3.75pc early next year and will be about 1.5 percentage points higher across 2027 than previously expected.<\/p>\n

Bigger price rises mean that households will experience no growth in their real earnings in 2027 or 2028, the OBR added.<\/p>\n

Higher inflation will also lead to interest rate rises from the Bank of England.<\/p>\n

The OBR expects the Bank will raise interest rates to 4.25pc by the middle of next year, up from 3.75pc today and 0.75 percentage points higher than the OBR had forecast back in March.<\/p>\n

The OBR said: \u201cThe UK\u2019s economic position remains challenging. A series of major adverse shocks since the global financial crisis, interacting with underlying structural trends, have contributed to persistently weak growth in per person GDP, episodes of sustained high inflation and subdued growth in real household disposable incomes.<\/p>\n

\u201cA broad range of factors, many of which originate outside the UK, will influence the UK\u2019s future economic performance.\u201d<\/p>\n

However, the OBR upgraded its forecast for GDP growth<\/a> this year to 1.2pc, up from the 1.1pc growth it had forecast in March.<\/p>\n

John Healey, the Chancellor, hailed this in his Budget speech on Wednesday as a \u201csign of resilience in the UK economy\u201d.<\/p>\n

Budget 2026: Key points at a glance<\/strong><\/h2>\n

Energy prices are expected to fall sharply next year, which should boost growth in the years ahead, the OBR said.<\/p>\n

It has forecast growth of 1.6pc in 2028, 1.8pc in 2029, 1.7pc in 2030 and 1.6pc in 2031, meaning UK GDP will be at a similar level by the end of the forecast period as the OBR expected back in March.<\/p>\n

However, in a blow for employment, Ladbrokes owner Entain on Wednesday signalled it could close betting shops after being hit with a \u00a325m annual tax increase from the Budget.<\/p>\n

The warning follows an increase to the machine games duty<\/a> from 20pc to 25pc, which the Treasury expects to raise an extra \u00a3100m annually.<\/p>\n

The gambling giant said it would consider \u201cestate rationalisation\u201d as part of efforts to offset the higher taxes by the end of 2028, alongside wider cost-cutting measures.<\/p>\n

Stella David, chief executive, said: \u201cThis is another disappointing decision by the Government.\u201d<\/p>\n

Separately, the Government announced a major crackdown on vape shops<\/a> after tough new measures were unveiled in the Budget to stop their proliferation in Britain\u2019s \u201chollowed out\u201d town centres.<\/p>\n

Under the proposal, new vape shops will have to seek planning permission from councils, giving local authorities power to control the number and location of openings.<\/p>\n

In another significant move, vape shops will no longer be eligible for business rates reliefs from April 2027. They will also be stripped of their entitlement to small business rates relief.<\/p>\n

 <\/p>\n

Source\u00a0<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

It is not just the British economy that has been negatively impacted by the war with Iran. The global economic slowdown is directly attributable to Trump\u2019s criminal campaign<\/p>\n","protected":false},"author":39262,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[66,146],"tags":[],"class_list":["post-332540","post","type-post","status-publish","format-standard","hentry","category-Economics","category-iran-u-s-israel-war"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/332540","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/users\/39262"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=332540"}],"version-history":[{"count":1,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/332540\/revisions"}],"predecessor-version":[{"id":332541,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/332540\/revisions\/332541"}],"wp:attachment":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=332540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=332540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=332540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}