Finance Forum Event March 31
What the Iran War means for the UK economy
The war in the Gulf is starting to hit the global economy. In the Philippines, a state of emergency has been declared over oil shortages, and other countries could soon face similar problems.
For President Donald Trump, the situation may be spiralling out of control. Iran has far more options to escalate the conflict than the United States, even if nuclear weapons were involved.
Oil prices are rising and could reach $150 a barrel. Even after the fighting ends, prices may stay high because refineries have shut down while oil supplies are blocked.
US threats to Iran’s civilian infrastructure have been met with counter-threats targeting desalination plants. Without these, much of the Gulf would become uninhabitable. Critical internet cables running under the Red Sea could also be at risk.
The US is offering talks while increasing its military presence. Kharg Island, a key oil hub, is reportedly a target. But the island’s terrain makes an attack extremely risky. Casualties would be high, congressional approval for funding is uncertain, and Iran’s reaction could further damage the global economy.
The most likely outcome is a staged de-escalation. Talks are already beginning. The challenge for the US is what concessions to make, as Iran is unlikely to accept a one-sided deal. One possibility is that Iran could allow all ships through the Strait of Hormuz if they pay fees, a solution insurers are already preparing for.
For the UK though, this is likely to all mean:
- Higher than forecast energy costs, and consumer spending to be impacted as a result
- Interest rates to increase potentially to combat inflation
- A battle over defence spending, especially now the Cypriots are challenging the defence provided
- The potential for more tax rises, in Q4
The Government will be desperate to minimise the damage, and already are starting to announce their policies to address this.
These are the themes we will be discussing at our next finance forum breakfast, so if you would like to attend, you can still register:
https://vacancysoft.com/events/finance-forum-march-2026/
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The data referenced above has been sourced from Vacancy Analytics, a cutting-edge Business Intelligence tool that tracks recruitment industry trends and identifies emerging hotspots. With 17 years of experience, we have a deep understanding of market activities in the UK and globally.
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