A new report has predicted that the UK\u2019s economy will flatline across the second and third quarters of this year, hovering on the brink of a technical recession – defined as two consecutive quarters of falling GDP<\/a>.<\/p>\n The latest Item Club report predicted a a modest 0.7 per cent rise in gross domestic product (GDP) over the entire year, a significant downgrade from the 1.4 per cent expansion initially forecast for 2025. <\/p>\n It comes just days after the International Monetary Fund (IMF<\/a>) warned Donald Trump<\/a>\u2019s war on Iran<\/a> risks triggering a global recession in a damning assessment of the conflict\u2019s impact<\/a> on the world economy.<\/p>\n The Item Club said higher oil and energy prices<\/a> will stifle activity, and the jobs market will endure its “biggest hit since the pandemic”.<\/p>\n It anticipates the UK\u2019s jobless rate will peak at 5.8 per cent by mid-2027, resulting in nearly 250,000 more people out of work. <\/p>\n Matt Swannell, chief economic adviser to the Item Club, said: “Spiralling energy costs and disruption to supply chains will push the UK to the brink of a technical recession in the middle of this year. <\/p>\n “Consumers\u2019 spending power will be squeezed, while more expensive financing arrangements and a less certain global economic backdrop will pour cold water on companies\u2019 investment plans.”<\/p>\n President Donald Trump has issued further threats to Iran<\/a> if a deal was not reached around the Strait of Hormuz, after it was reported that Iranian forces were refusing passage through the key trading route over the weekend.<\/p>\n The IMF has said the international outlook had \u201cabruptly darkened\u201d as a result of the war, which threatens to throw the global economy \u201coff course\u201d and could cause an energy crisis on an unprecedented scale.<\/p>\n It last week highlighted the UK as facing the largest growth downgrade among G7 nations, with a forecast of 0.8 per cent for 2026, sharply down from 1.3 per cent predicted in January. <\/p>\n However, recent data indicated stronger-than-expected economic momentum before the full impact of the Iran conflict, with GDP growing by 0.5 per cent month-on-month in February \u2013 the fastest expansion since January 2024.<\/p>\n![\"The](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/04\/2026-04-15T063129Z_1964057371_RC28G2AAAIT1_RTRMADP_3_ROBERT-WALTERS-OUTLOOK.jpg\")
The Item Club said higher oil and energy prices will stifle activity, and the jobs market will endure its \u2018biggest hit since the pandemic\u2019 (Reuters)<\/p>\n![\"In](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/04\/71f19079cf2783103f422c1dd5f6e4e8Y29udGVudHNlYXJjaGFwaSwxNzc2Njc4MzA5-2.84300690.jpg\")
In a further blow to Sir Keir Starmer IMF has said the international outlook had \u201cabruptly darkened\u201d as a result of the war (PA)<\/p>\n