The UK economy could see growth as low as 0.3% in 2027 if disruption to the Straight of Hormuz linked to Iran war continues through the end of 2026, PA Media reported Wednesday, citing internal Treasury modelling briefed to the Prime Minister.

PA Media reported that officials said they routinely model for a range of scenarios, with this projection tied to a more extreme case.

Modelling shown to the Prime Minister and Chancellor, first reported by Bloomberg, indicated the UK economy could grow 0.9% this year absent a permanent peace deal between US-Israeli forces and Iran, below the Office for Budget Responsibility's 1.1% forecast.

PA Media said the modelling showed Consumer Price Index inflation could peak at 4.3% in the first quarter of 2027, with Strait of Hormuz disruption expected to keep oil and gas prices elevated.

UK Parliament did not immediately respond to a request for comment from MT Newswires.

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