The International Monetary Fund (IMF) warned that the weak British economy faces the biggest economic shock in the G7, the most advanced industrialised nations in the world, as a result of the US-Israeli war on Iran.
The IMF said that the UK’s reliance on energy imports meant it was especially vulnerable to the rapid increase in the price of oil and gas and that this meant the British economy would suffer a ‘slowdown’ much greater than other countries ‘as the impact of higher energy prices linger’ for years to come.
Even the most optimistic analysts are warning that the fall-out from the illegal war and blockade of Iran by US imperialism and its Zionist ally will mean surging household energy bills for at least two years.
Experts are predicting that household gas and electricity bills will increase by up to 20% this summer taking the average bill to £2,000 in July.
On top of this, the IMF warned of ‘substantial’ increases in food prices as closure of the Strait of Hormuz has led to a massive world shortage in fertilisers essential for farmers especially before the spring planting season.
The IMF forecasts that UK inflation – which reflects the increase in the price of goods and services – will increase to 3.2%, way above the Bank of England prediction of bringing inflation down to 2%, ruling out any cut in the interest rate.
A report this week from the Resolution Foundation think tank estimated that the increase in prices would leave the average household in Britain £480 poorer in 2026 while the IMF is warning that UK unemployment will increase from 4.9% last year to 5.6% in 2026.
While the UK will bear the heaviest toll of any major nation, the IMF, currently in Washington for its spring meeting, also warns that Trump’s war on Iran is tipping the world into a massive global recession.
IMF economic counsellor Pierre-Olivier Gourinchas told reporters, ‘The closing of the Strait of Hormuz and serious damage to critical energy facilities in the Middle East have raised the prospect of a major energy crisis, should a durable solution not be found soon.’
In fact, the IMF admits that its predictions, dire as they are, are dependent on a quick ending of the war on Iran.
In other words US imperialism is admitting defeat and running away from a war it, along with the Israeli regime, started, to impose American dominance over the Middle East and its vast energy reserves.
Labour chancellor, Rachel Reeves, attending the IMF conference, told reporters: ‘The war in Iran is not our war but it will come at a cost to the UK’, adding: ‘These are not costs I wanted, but they are costs we will have to respond to.’
Reeves and Starmer intend to make the working class and youth pay the costs of the imperialist war through imposing mass unemployment and wage cutting austerity measures, in a desperate attempt to rescue a bankrupt British capitalist system from crashing into recession.
The powerful British working class has had enough of being made to sacrifice in order to bail out the bankers and bosses, and will take inspiration from the determination of the Iranian people not to submit to Trump’s bullying, in defence of Iranian sovereign rights.
The working class must now demand that the TUC show the same determination to defend the rights and gains made by workers, by calling a special conference of the TUC to mobilise the working class in a general strike to bring down the Starmer government and replace it with a workers government and a socialist planned economy.
Those members of the TUC who refuse to fight must be sacked and replaced by a new leadership prepared to act and lead the struggle for the working class to take power, by overthrowing bankrupt British capitalism, which has long outlived its ability to provide any future for workers and youth.
Join the WRP and Young Socialists – build up the leadership required for the victory of the British socialist revolution.
There is no time to lose!
