{"id":114465,"date":"2026-05-14T23:59:21","date_gmt":"2026-05-14T23:59:21","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/114465\/"},"modified":"2026-05-14T23:59:21","modified_gmt":"2026-05-14T23:59:21","slug":"uk-economy-was-on-the-right-track-trumps-iran-war-has-wrecked-that","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/114465\/","title":{"rendered":"UK economy was on the right track \u2013 Trump\u2019s Iran war has wrecked that"},"content":{"rendered":"\n

The UK economy<\/a> has a habit of surprising. Even when the margins are fine \u2013 and the most minuscule growth was being celebrated<\/a> as cautious small steps in the right direction \u2013 the point was being made that it was the right direction and, with a bit more time and support, good things could happen.<\/p>\n

Much of 2024 and 2025 saw the narrative of hard decisions being made to enable prosperity in years to come. While the first three months of 2026 producing GDP growth of 0.6 per cent <\/a>won\u2019t exactly be seen as being on the cusp of riches, it has certainly allowed Rachel Reeves<\/a> to point to a bullish outcome from her early decisions as chancellor.<\/p>\n

\u201cThe numbers show that the economy is growing and that when we entered this conflict, our economy was growing strongly because of the decisions that I have made as chancellor,\u201d she said on Thursday, before urging fellow members of Labour not to put that progress \u201cat risk\u201d by pushing Keir Starmer aside<\/a>.<\/p>\n

These economic figures have again surprised some with their relative overperformance, higher than many economists expected \u2013 even featuring growth in March, the first full month of the Iran war when some thought the immediate consumer reaction would be cautious, holding, hoarding.<\/p>\n

But almost certainly, the growth is to be consigned to nothing more than a footnote of 2026 \u2013 a useful boost at the beginning of the year before matters, both economic and political, started to unravel.<\/p>\n

It\u2019s almost tempting to label it a case of \u2013 in the tradition of those British TV gameshows of yesteryear \u2013 \u201chere\u2019s what you could have won\u201d.<\/p>\n

The economy was growing, inflation<\/a> was falling, the Bank of England<\/a> had interest rates on the downward path.<\/p>\n

Fast forward precisely one more war, the best part of 3,000 miles away, and all of that is effectively wiped from the slate. Donald Trump<\/a>\u2019s assault on Iran has seen the Strait of Hormuz shuttered, oil prices surging as a result and the knock-on effects have been higher prices in fuel, energy, production, manufacturing and food. Inflation back on the rise has sent mortgage deals up, based on the now-obsolete plan to further reduce interest rates, while households are facing another inevitable bout of higher costs from all angles, businesses are pausing hiring plans and the bond markets have sent government borrowing costs soaring.<\/p>\n

And yet it is, as ever, absurd and simplistic to entirely blame one single event or decision for all the knock-on effects to come. After all, even in the early part of the year, when the economy as we can see was performing reasonably well, there were plenty of dissatisfied onlookers.<\/p>\n

Business groups were bemoaning the increasing cost of hiring. Different industries were, and still are, demanding additional support, either by way of exemptions or outright lowered costs.<\/p>\n

And while the Bank of England was on a downward path, unemployment had been on an upward path since mid-2022, with additional concerns arising in the past year over entry-level jobs and graduates finding work \u2013 all different pressures which, along with inflation, economic performance, pay growth and more, pull and push interest rates decisions in different directions at the same time.<\/p>\n

There is also the economic aspect of bringing forward some purchases to the first half of the year, seasonality spending rather than increased overall consumption. This has been seen in previous years and could simply have been the case, in an alternative 2026, that growth was first-half heavy and still fairly flat over the whole year.<\/p>\n

So it\u2019s far from the case of going from all great to all bad, yet there\u2019s no question the chances of real progress have been hampered.<\/p>\n

\"Rachel Rachel Reeves has urged Labour MPs not to put economic progress \u2018at risk\u2019 by forcing Keir Starmer\u2019s resignation (PA Wire) <\/p>\n

The version of the economy which is described by first-quarter numbers no longer exists. That future has been wiped out for us, this year at least.<\/p>\n

Yet, there\u2019s also now reason to point to domestic matters which could have happened anyway (see local elections and their subsequent fallout) contributing to uncertainty and hampering national growth, too.<\/p>\n

Either way, firms and households have to deal with the reality of what\u2019s in front of them \u2013 and that looks like a tough period of balancing priorities and finances for all.<\/p>\n

The hope will be that the resilience which British businesses and consumers have shown before will, against odds and expectations, be able to shine through once more, regardless of what muddles and messes are presented to them by leaders both near and far.<\/p>\n","protected":false},"excerpt":{"rendered":"The UK economy has a habit of surprising. Even when the margins are fine \u2013 and the most…\n","protected":false},"author":2,"featured_media":114466,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[39547,39546,3509,34,688,2676],"class_list":{"0":"post-114465","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-iran","8":"tag-gdp-growth","9":"tag-hard-decisions","10":"tag-interest-rates","11":"tag-iran","12":"tag-keir-starmer","13":"tag-rachel-reeves"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116575650877453381","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/114465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=114465"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/114465\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/114466"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=114465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=114465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=114465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}