The UK economy has contracted, reversing earlier expansion as the Iran conflict increasingly drags on domestic business output.
The downturn signals that the geopolitical shock is no longer confined to energy markets and shipping routes; it is now translating into tangible drag on Western economic activity.
The contraction arrives as the Organisation for Economic Cooperation and Development has sharply reduced its global growth projections, citing the deepening economic fallout from the U.S.-Iran war.
The OECD’s latest assessment highlights the risk that prolonged Middle East tensions could suppress trade flows and dampen business confidence across advanced economies.
Meanwhile, Chinese manufacturing activity has shown signs of slowing as the ripple effects of the Mideast conflict begin to impact global trade volumes and supply chain stability.
Markets will now look to central bank policymakers to gauge whether this fresh growth headwind alters the trajectory for monetary easing, particularly as inflation dynamics in Europe remain sensitive to energy and freight costs.