🇬🇧 NEW: The UK could tip into recession in 2027 if the Strait of Hormuz stays closed past mid-2027, EY warns.

What happened

EY warned that if the Strait of Hormuz remains closed beyond mid‑2027, the United Kingdom could fall into a recession in 2027.

Confirmed

Global impact / market context

A recession would lower consumer spending and business investment, pressuring UK companies’ earnings and potentially reducing tax revenues, which could lead to tighter fiscal policy and higher borrowing costs.

Analyst inference

The warning comes as global oil supplies depend on the Strait of Hormuz; prolonged closure would push oil prices up, raising inflation and hurting growth prospects for the UK economy.

Analyst inference

What to watch

1. Monitor any diplomatic or military developments that could reopen the Strait of Hormuz, as this would ease oil price pressure and support UK growth. Proposed
2. Watch UK oil import volumes and fuel price trends, because a closed Strait would raise energy costs and directly affect inflation and consumer spending. Analyst inference
3. Track UK fiscal statements for signs of spending cuts or tax changes that may be introduced to offset recession risks. Proposed

Evidence

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