The UK economy is experiencing strong growth, but is threatened by the Iran war and political instability

Gold Finance reported that on May 14, the UK’s economy started the year with strong growth momentum, but now it faces risks due to the lingering effects of the Iran war and the possibility of a change in prime minister. Data released by the UK’s Office for National Statistics on Thursday showed that first-quarter gross domestic product (GDP) grew by 0.6%, up from 0.2% in the previous three months and the fastest pace in a year. The figure matches the median forecast of economists and is also higher than the Bank of England’s forecast of 0.5%. A strong start in 2026 was largely driven by robust growth in February, when the Iran war had not yet erupted—the economy expanded by 0.4%. However, economic growth in March also reached 0.3%, mainly thanks to strong growth in the services sector. Economists had previously expected a slight decline in March’s economic growth rate. Despite an overall relatively optimistic economic outlook, the Labour Party suffered a crushing defeat in last week’s local elections, and Prime Minister Starmer’s position may be difficult to consolidate. Economists and investors warn that political turmoil will put pressure on the UK’s economic prospects. The turmoil has already disrupted the bond market, raising borrowing costs for long-term bonds. (East New Agency)