LONDON, Aug 3 (Reuters) – Britain’s economy is likely to shrink in 2027 if the Strait of Hormuz does not \u200creopen to shipping before the middle of next year, \u200cforecasters at accountants EY warned on Monday. <\/p>\n
EY slightly nudged up its growth forecast \u200bfor this year to 0.8% from 0.9%, on the basis that the Strait reopens by the end of September, and sees growth of 1.2% in 2027 on that basis. <\/p>\n
“If the Strait of Hormuz \u200creopens in the coming \u2060months, we expect the UK to avoid a more pronounced downturn, but an extended closure into 2027 \u2060would raise inflation and could push the economy into contraction next year,” EY UK Chief Economist Peter Arnold said. <\/p>\n
\u2022 EY predicts that if \u200bthe \u200bStrait of Hormuz remains shut until \u200bearly to mid 2027, \u200cUK growth this year will slow to 0.5% and that the economy will shrink 0.2% in 2027 <\/p>\n
\u2022 Inflation is likely to rise to 6.4% by the end of 2026 under that scenario, compared with a lower peak of 3.5% this year if the \u200cStrait reopens in the next couple of \u200bmonths <\/p>\n
\u2022 Bank of England forecasts last \u200bweek, under an adverse \u200bscenario where oil and gas prices remain 30%-60% \u200chigher than markets expect, still showed \u200bthe economy growing \u200bby close to 1% next year while quarterly inflation peaked at 4.5% <\/p>\n
\u2022 EY expects the BoE to keep interest rates \u200bon hold this \u200cyear and then cut them next year from 3.75% \u200bto 3.25% with moves in April and July <\/p>\n
(Reporting by David \u200bMilliken; editing by Suban Abdulla) <\/p>\n","protected":false},"excerpt":{"rendered":"LONDON, Aug 3 (Reuters) – Britain’s economy is likely to shrink in 2027 if the Strait of Hormuz…\n","protected":false},"author":2,"featured_media":95974,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[4],"tags":[12673,1146,5,6],"class_list":["post-95973","post","type-post","status-publish","format-standard","has-post-thumbnail","category-uk","tag-ey","tag-strait-of-hormuz","tag-uk","tag-united-kingdom"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/117028706330705104","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/95973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=95973"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/95973\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/95974"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=95973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=95973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=95973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}