Analysts at accounting firm Ernst & Young warned on Monday that if the Strait of Hormuz does not resume navigation by mid-next year, the UK economy may shrink in 2027. Based on the assumption that navigation will resume in the Strait of Hormuz by the end of September, EY slightly raised the UK's economic growth forecast for this year from 0.8% to 0.9%, and expects economic growth of 1.2% in 2027. “If the Strait of Hormuz resumes navigation within the next few months, we expect the UK to avoid a more severe economic downturn; however, if the shutdown continues until 2027, it will push up inflation and may cause the UK economy to shrink next year,” said Peter Arnold, chief economist at EY UK. EY predicts that if the Strait of Hormuz is closed until early to mid-2027, the UK's economic growth rate will slow to 0.5% this year, and the economy will shrink by 0.2% in 2027.

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