UK faces biggest hit to growth from Iran war of major economies, IMF says
The financial body cuts its growth forecast for the UK and warns the war threatens to throw the global economy "off course".
Coverage by Political Leaning
See how different sides of the spectrum reported this story
Notable Quotes
"The war in Iran is not our war, but it will come at a cost to the UK."
— Rachel Reeves , Politician
"A small bit of economic pain for weeks was worth it for the security of eliminating the risk of Iran deploying nuclear weapons."
— Scott Bessent , Executive
"Reeves had no one to blame but herself for the size of the IMF's downgrade."
— Sir Mel Stride , Politician
"Countries including the UK should be very cautious about introducing assistance programmes."
— Pierre-Olivier Gourinchas , Academic
"It is hoped that much of this economic shock will be short-lived, provided the conflict does not drag on."
— Lindsay James , Executive
"Tensions remain ratcheted up [despite the ceasefire]... even with any resolution, things are unlikely to go back to normal and we should now have to get familiar with elevated oil and gas prices for the foreseeable future."
— Lindsay James , Executive
"The war in Iran is not our war, but it will come at a cost to the UK. These are not costs I wanted, but they are costs we will have to respond to."
— Rachel Reeves , Politician
"Being handed the biggest downgrade in the G7 is a clear verdict on Rachel Reeves’ choices — and she’s got no one to blame but herself."
— Mel Stride , Politician
"The war in Iran is not our war, but it will come at a cost to the UK."
— Rachel Reeves , Politician
"A small bit of economic pain for weeks was worth it for the security of eliminating the risk of Iran deploying nuclear weapons."
— Scott Bessent , Executive
"Countries including the UK should be very cautious about introducing assistance programmes."
— Pierre-Olivier Gourinchas , Academic
"Reeves had no one to blame but herself for the size of the IMF's downgrade."
— Sir Mel Stride , Politician
Key People
Lindsay James is an investment strategist at Quilter.
Mel Stride is the Shadow Chancellor.
Pierre-Olivier Gourinchas is the chief economist at the International Monetary Fund.
Chancellor who announced guaranteed paid work placements for youth.
Scott Bessent is the Treasury Secretary.
Sir Mel Stride is the Shadow Chancellor of the Exchequer.
Tags
All Coverage
The financial body cuts its growth forecast for the UK and warns the war threatens to throw the global economy "off course".
The IMF has downgraded the UK's 2026 growth forecast to 0.8%, the largest cut among G7 economies, due to the economic impact of the Iran war.
The IMF has downgraded the UK's 2026 growth forecast to 0.8%, citing the economic impact of the Iran war and its inflationary effects.
The IMF has revised the Eurozone's 2026 growth forecast down to 1.1% from 1.4%, attributing the downgrade to the Iran conflict's economic repercussions.
The IMF forecasts the UK will experience the most significant economic shock among advanced economies due to the Iran war, with growth downgraded to 0.8% in 2026.
The IMF warns that the Eurozone's growth will slow this year and inflation will surge, even if the Iran conflict is resolved by mid-year.
Similar Stories
Related coverage based on topic and tags
Iran faces 'greatest financial offensive ever', says US treasury secretary
Scott Bessent says the US will sever all economic ties with the country and that any nation partnering with Iran financially will also be isolated.
August 24, 2026 at 10:39 AMWar weighs on Iran's economy as US intensifies sanctions - Reuters
War weighs on Iran's economy as US intensifies sanctions Reuters
August 29, 2026 at 02:04 AMUS-hosted G20 finance meeting to target growth, imbalances, Iran sanctions, Treasury official says - Reuters
US-hosted G20 finance meeting to target growth, imbalances, Iran sanctions, Treasury official says Reuters
August 28, 2026 at 12:29 AMSix months into Iran war, almost half of global oil flows from war zones - Reuters
Six months into Iran war, almost half of global oil flows from war zones Reuters
August 25, 2026 at 05:05 AMEuropean shares muted as investors assess Iran-Oman talks, U.S. inflation - Reuters
European shares muted as investors assess Iran-Oman talks, U.S. inflation Reuters
August 26, 2026 at 04:41 PMOil set for second weekly rise as unsettled US-Iran war crimps supply - Reuters
Oil set for second weekly rise as unsettled US-Iran war crimps supply Reuters
August 21, 2026 at 01:50 AM