The National Institute of Economic and Social Research has warned that Britain faces a £35 billion economic hit and recession risk this year due to the Iran war's impact on energy prices, downgrading 2026 growth forecasts to 0.9%. The thinktank cautioned that under an adverse scenario with oil reaching $140 per barrel, UK inflation could exceed 5%, potentially forcing the Bank of England to raise interest rates sharply.
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The National Institute of Economic and Social Research has warned that Britain faces a £35 billion economic hit and recession risk this year due to the Iran war's impact on energy prices, downgrading 2026 growth forecasts to 0.9%. The thinktank cautioned that under an adverse scenario with oil reaching $140 per barrel, UK inflation could exceed 5%, potentially forcing the Bank of England to raise interest rates sharply.