Published Mon, Aug 3, 2026 \u00b7 07:35 AM<\/p>\n
[LONDON] Britain\u2019s economy is likely to shrink in 2027 if the Strait of Hormuz does not reopen to shipping before the middle of that year, forecasters at accountants EY warned on Monday (Aug 3).<\/p>\n
EY slightly nudged up its growth forecast for 2026 to 0.8 per cent, on the basis that the strait reopens by the end of September, and sees growth of 1.2 per cent in 2027 on that basis.<\/p>\n
\u201cIf the Strait of Hormuz reopens in the coming months, we expect the UK to avoid a more pronounced downturn, but an extended closure into 2027 would raise inflation and could push the economy into contraction next year,\u201d EY UK chief economist Peter Arnold said.<\/p>\n
EY predicts that if the Strait of Hormuz remains shut until early to mid 2027, UK growth in 2026 will slow to 0.5 per cent and that the economy will shrink 0.2 per cent in 2027<\/p>\n
Inflation is likely to rise to 6.4 per cent by the end of 2026 under that scenario, compared with a lower peak of 3.5 per cent in 2026 if the strait reopens in the next couple of months.<\/p>\n