US Treasury Secretary Scott Bessent told the BBC that a "small bit of economic pain" from the war with Iran is acceptable for long-term international security. He allegedly stated that he is less concerned about short-term economic forecasts than the threat posed by Iran's nuclear program and ballistic missiles capable of reaching London. "I wonder what the hit to global GDP would be if a nuclear weapon hit London... I am saying that I am less concerned about short-term forecasts, for long-term security," he said, framing the conflict as necessary to eliminate the risk of Iranian nuclear strikes on Western capitals.

The International Monetary Fund (IMF) warned that the US-Iran war could plunge the global economy into recession. In its World Economic Outlook report, the IMF said that in a worst-case scenario—with oil, gas, and food prices spiking and remaining high—global growth could fall below 2% in 2026, bringing the world close to a recession. IMF Chief Economist Pierre-Olivier Gourinchas told the BBC that a prolonged conflict would lead to spiraling inflation, increased unemployment, and food insecurity in some countries, comparing the potential oil supply impact to the 1970s oil crisis.

Oil prices have soared to nearly $120 per barrel since the war began but have since retreated to $95. According to IMF forecasts, the UK economy is expected to be the hardest hit among advanced economies, with growth cut to 0.8% in 2026. Gulf oil exporters, including Iran (-6.1%), Qatar (-8.6%), and Iraq (-6.8%), are projected to see sharp slowdowns or contractions this year, with recoveries in 2027. In contrast, Russia is purportedly benefiting from higher oil prices, with GDP growth forecast at 1.1% in 2026 and 2027, ahead of previous estimates, as the US regime under Donald Trump has lifted some sanctions on Russian and Iranian oil exports.

The UK government said there is "no assessment" that Iran is trying to target Europe with missiles, but claimed it has the military capability to defend the country from any attacks. Bessent added that US and Israeli strikes have removed the "tail risk" of Iranian nuclear strikes against Western countries, although the BBC has previously reported that the threat of Iranian ballistic missiles to London is remote. European Commissioner for Finance Valdis Dombrovskis warned against easing sanctions on Russia, arguing that the country is "emerging as a winner from this war" due to increased energy revenues, highlighting the geopolitical costs and friction within the US-aligned bloc.

Source: www.bbc.com