The International Monetary Fund (IMF) has warned the UK will be the advanced economy hit hardest by the energy shock sparked by the Iran war.
The IMF slashed its estimated growth projection for the UK for the year from 1.3% to 0.8% in its latest World Economic Outlook.
Explaining the context behind the sharp change, the IMF said it was due to the impact of the conflict in the Middle East, fewer interest rate cuts and the likelihood of higher prices remaining into next year.
The IMF further warned that a prolonged war risked causing a global recession.
It comes after a similar prediction from the Organisation for Economic Co-operation and Development at the end of last month.
The BBC reports Chancellor Rachel Reeves responded to the IMF forecast, commenting: "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.
"We entered this conflict in a stronger position because of the choices this government took to build economic stability, but there is more to do."
FSTE100
The UK's flagship share index, the FTSE 100, was up 17 points at 10,627 shortly after opening this morning.
Brent crude oil futures were down 0.49% trading at $94.68 a barrel.
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