Which Economy Suffers Most From Iran War Fallout

The U.K. economy is expected to take the hardest hit among advanced economies due to the Iran war, according to the International Monetary Fund’s latest outlook.

The IMF projects U.K. growth will slow to 0.8% in 2026, down from 1.3% in 2025, reported by the IMF. This marks the steepest downgrade among G7 nations, with the U.S. forecast at 2.3% and the euro area at 1.1%.

Iran war will hit UK growth the hardest of any rich economies, IMF says https://t.co/rE4RkCyYsR

— CNBC International (@CNBCi) April 14, 2026

According to IMF chief economist Pierre-Olivier Gourinchas, the conflict has disrupted global momentum, pushing growth down to 3.1% and raising inflation expectations to 4.4%. He said central banks have limited tools to counter energy-driven shocks tied to Gulf oil markets.

The report warned that a prolonged war could trigger worse outcomes, including slower global growth near 2% and inflation rising to 6%.

The IMF said rising debt, geopolitical fragmentation and fragile markets could deepen the crisis if the conflict intensifies.

Also Read:

IMF Warns Iran War Could Trigger Global Recession

The International Monetary Fund has downgraded its global growth outlook, warning that an escalation in the Iran war could push the world economy close to recession. The IMF said rising oil prices and supply disruptions are already weighing on economic activity. In its baseline scenario, global growth is projected at

tippinsightsTIPP Staff