DID Press: UK Chancellor John Healey has warned that the continuing war between the United States and Iran is placing significant pressure on Britain and the global economy, with rising energy prices threatening to fuel inflation and weaken economic growth.
In an interview with the Financial Times, Healey said the conflict in the Middle East had created a difficult economic environment for Britain, affecting inflation, growth prospects and government borrowing costs.
The conflict has pushed oil prices above $90 a barrel and increased energy costs for households and businesses. The resulting inflationary pressure could further constrain the British government’s fiscal room ahead of its autumn Budget.
Financial markets have also come under pressure as investors assess the economic consequences of a prolonged conflict. Rising borrowing costs and concerns over government finances have contributed to pressure on bond markets.
Healey’s warning comes as the British government prepares its next Budget amid concerns that continued instability in the Middle East could further weaken economic growth and increase the cost of servicing government debt.