Iran war escalation could trigger global recession, IMF warns

Growth forecasts cut for US and global economy, while UK suffers sharpest downgrade in G7

• Reeves arrives at IMF with little leeway to prove its UK downgrade wrong

A further escalation in the Iran war could trigger a global recession that would affect the UK more than any of the other G7 nations, the International Monetary Fund has warned.

Against an increasingly volatile backdrop, the Washington-based fund said the economic damage from the Middle East conflict was steadily rising as it cut its growth forecasts for 2026 based on the impact from the war so far.