EY warns UK economy may contract if Hormuz stays closed

EY, a big accounting firm, said the UK might get into a recession in 2027 if a key waterway called the Strait of Hormuz stays shut.

That waterway lets a lot of oil and gas pass through, so if it’s closed, energy prices go up.

Higher energy costs can make things more expensive for people and businesses, which can slow the economy.

EY thinks that if the waterway opens before the end of 2026, the UK can keep growing a little.

But if it stays closed into 2027, the economy could shrink a bit and inflation could rise to about 6%.

The Bank of England might keep interest rates high until 2026 and then cut them in 2027.

Meanwhile, job postings are falling and wages are growing more slowly, which also worries the economy.