UK economy contracts due to Middle East conflict

12 Jun 2026

The UK's economy contracted by 0.1% in April due to the impact of the war in Iran, according to data from the Office for National Statistics (ONS).

The first monthly contraction since August last year was driven by a decline in output from the key services sector, said the ONS.

Businesses cited the conflict in the Middle East as having raised costs and affected turnover, it added.

In the three months to April, the ONS said the economy grew by 0.7% compared with the previous three-month period.

Stuart Morrison, Research Manager at the British Chambers of Commerce, said: 'Growth of 0.7% in the three months to April shows the UK economy maintained good momentum from the start of the year, as businesses again proved resilient.

'But the fall of 0.1% for the month may be the first sign of the impacts of the Iran conflict. While monthly figures can be volatile, this is a signal that will need to be closely monitored.

'Businesses have already told us about the direct impacts they are facing from the conflict. 

'Against this backdrop, it is vital that the UK remains a stable and supportive environment for business. Firms are not looking for quick fixes, they want certainty to make long-term decisions on investment, hiring and expansion. 

'To unlock growth, government and business must work in partnership to help firms trade more, invest in new technology and develop a skilled workforce for the future.'