EXCLUSIVE: Andy Burnham and John Healey have been told by the Treasury that the UK economy will barely grow next year if the Strait of Hormuz remains badly disrupted until the end of 2026 The PM and chancellor have been presented with Treasury modelling that sees UK GDP growth at just 0.3% in 2027 if the strait remains blocked this year. The warning complicates the first 18 months of Burnham’s premiership and Healey’s preparations for the budget In a reasonable worst-case scenario modelled by the Treasury, the strait is seen remaining effectively closed for five more months, with no permanent peace deal between the US and Iran until the new year In that scenario, GDP growth for 2026 is seen at 0.9%, below the 1.1% forecast by the OBR in March. But with the impacts taking time to fully filter through, GDP growth for 2027 is then seen at just 0.3%, a sharp downgrade on the 1.6% forecast by the OBR CPI inflation is seen peaking at 4.3% in the first quarter of 2027 in this scenario. It would have fallen to the 2% target if the war hadn’t happened. A further spike in the oil price could raise concerns about financial stability in a worst-case outcome, the Treasury assessments warned They have been shared with Burnham and Healey ahead of the budget on Oct. 28, setting out the economic headwinds that will determine this government’s fortunes If the economy effectively flatlines next year, it would leave Burnham with a battle to show Britons he has materially improved their lives in his first 18 months in power. The warnings also further complicate what is already a challenging budget for Healey. Not only must he find money to fulfil Burnham’s ambitions for more spending, he now also has to factor in a potential growth downgrade and higher inflation While Treasury officials do not necessarily expect the worst-case scenario to happen, they see it as a reasonably likely outcome. Officials calculate that while the future of the conflict is highly uncertain, it is likely that it continues to flare-up in the months ahead, severely disrupting commercial traffic through the strait bloomberg.com/news/articles/…