OBR slashes UK growth forecast for 2027 as Middle East conflict hits economy

The Office for Budget Responsibility (OBR) has sharply downgraded Britain's growth forecast for 2027, citing the economic fallout from the Middle East conflict. The independent forecaster's report, released alongside Chancellor John Healey's first budget, points to a multibillion-pound hit to the economy, with slower growth and a fresh cost of living crisis. Living standards are also expected to suffer, as the OBR downgraded its outlook for household incomes. Healey announced a £100 payment to households to help navigate what he called 'global economic storms,' but the OBR's assessment suggests the measures may not fully offset the external shock. The downgrade raises pressure on the government's fiscal plans, with public finances also taking a hit. The chancellor's budget included targeted support, but the OBR's warning underscores the vulnerability of the UK economy to geopolitical risks. As the conflict continues, policymakers face tough choices to balance support for households with long-term fiscal sustainability.