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  "path": "/money/uk-economy-at-risk-of-recession-as-rachel-reeves",
  "publishedAt": "2026-03-23T09:54:58.000Z",
  "site": "https://www.gbnews.com",
  "tags": [
    "Ftse 100 plunges as Donald Trump's Strait of Hormuz threats see oil prices surging",
    "Dragon’s Den entrepreneur transforms Covid lockdown idea into eco-friendly business success",
    "High street retailer announces major online closure in effort to drive customers to 500 stores",
    "The GB News Editorial Charter"
  ],
  "textContent": "\n\n\nThe conflict in Iran has disrupted Chancellor Rachel Reeves’ economic strategy, with Treasury officials warning of a \"very difficult Budget\" later this year.\n\nLabour began 2026 promising stability and lower living costs, with plans built on falling inflation, easing interest rates and improving business confidence.\n\n###\n\n\n\n\nThose expectations have been undermined by escalating geopolitical tensions, with the Bank of England signalling potential interest rate increases.\n\nEconomists have warned the crisis has significantly altered the UK’s economic outlook.\n\n###\n\n\n\n\nTRENDING\n\nStories\n\nVideos\n\nYour Say\n\n###\n\n\n\n\nOfficials are now facing a more challenging fiscal environment as economic conditions deteriorate.\n\nLuke Bartholomew, deputy chief economist at Aberdeen, said: \"The risk of recession has significantly increased at this point.\"\n\nHe added higher borrowing costs and rising energy prices could deliver a \"double whammy\" to the UK economy.\n\n\"It is difficult to feel optimistic about the macro outlook right now.\"\n\nHouseholds are expected to face increasing financial pressure as wage growth slows and costs rise.\n\n###\n\n\n\n\n###\n\n\n\n\n###\n\n\n\n\nInflation is forecast to exceed three per cent later this year, which could reduce real incomes as spending on essentials increases.\n\nGovernment bond prices fell towards the end of last week as markets reacted to expectations of higher interest rates and concerns over the public finances.\n\nA rout in the gilt market deepened on Monday as traders bet the Bank of England would be forced to raise interest rates four times this year to counter surging energy prices.\n\nTraders in the swaps market are now fully pricing in four quarter‑point rate rises by the Bank in 2026 — up from three expected last week.\n\n### LATEST DEVELOPMENTS\n\n\n\n\n  * Ftse 100 plunges as Donald Trump's Strait of Hormuz threats see oil prices surging\n  * Dragon’s Den entrepreneur transforms Covid lockdown idea into eco-friendly business success\n  * High street retailer announces major online closure in effort to drive customers to 500 stores\n\n\n\n###\n\n\n\n\n###\n\n\n\n\nBefore the conflict began, investors had been anticipating two cuts.\n\nDerek Halpenny, head of research in global markets for Europe, the Middle East and Africa at MUFG, said the gilt moves were “starting to look very excessive”, adding that expectations of four rate rises were “way overdone”.\n\nSpeculation senior Labour figures had considered loosening fiscal rules added to market volatility.\n\nThe Treasury rejected those suggestions, with an ally of the Chancellor stating: \"Be in no doubt of this Government’s commitment to the fiscal rules.\"\n\n###\n\n\n\n\n###\n\n\n\n\nDan Haile, senior economist at the Institute for Government, said Ms Reeves would have to \"wave goodbye\" to her £22billion fiscal buffer.\n\nHe said: \"That number disappears into the rear-view window.\"\n\nEarlier in the year, Ms Reeves said the UK could absorb economic shocks without raising taxes.\n\nWhen asked this week whether position remained, she said the country was in a \"much stronger position\" than in July 2024 but did not rule out future tax increases.\n\nThe Resolution Foundation has proposed allocating £3.75billion per year to support lower-income households with energy costs.\n\n###\n\n\n\n\n###\n\n\n\n\nRuth Curtice, chief executive of the think-tank, said: \"This is not the time for the UK public finances to take a huge unlimited bet on the path of energy markets.\"\n\nHigher-income households may be expected to adjust their spending to manage rising costs.\n\nMake UK said conditions for manufacturers were becoming increasingly difficult and called on the Government to accelerate planned energy support measures.\n\nNick Butler, a former head of strategy at BP, said: \"The Government needs to come forward with a plan to manage continuity of supply.\"\n\nHe warned sectors including food production, healthcare, education and transport could struggle to absorb sustained price increases.\n\n###\n\n\n\n\n**Our Standards: The GB News Editorial Charter**",
  "title": "UK economy 'at risk of recession' as bond markets project FOUR Bank of England interest rate rises"
}