Middle East conflict: A manageable shock for the UK economy?

The UK economy faces a new shock from the Middle East conflict, with energy prices rising and shaking investors. However, the impact is expected to be modest and short‑lived. A repeat of pandemic era inflation is unlikely, even after the surge in energy prices, and easing domestic demand and a softening labour market are helping keep disinflation on track. While growth slows in 2026, the macro backdrop remains manageable, with inflation expected to return close to target by year‑end. Morningstar’s ‘UK Economic Outlook’ report assesses what the current economic environment means for monetary...