A leaked internal Treasury memo confirms the British economy has slipped into contraction for the first quarter of the year, with GDP declining by 0.3%. Sources inside the department say the Iran crisis is the culprit.
The cost of maintaining naval patrols in the Strait of Hormuz, combined with a spike in oil prices, has hammered trade-dependent sectors. Shipping volumes through the Suez Canal have dropped by 12%, and manufacturing output has slumped. The Treasury now models a 'prolonged period of instability' lasting at least 12 months.
One official described the situation as a 'slow puncture' with no easy fix. The Chancellor is reportedly considering emergency measures, but the fiscal headroom is almost gone. This is the story the government does not want you to see.
