UK Economy More Resilient Than Expected After Iran War Shock, CBI Says

The CBI’s senior lead economist says the latest figures show the UK economy has held up better than markets anticipated following the economic fallout from the Iran war, though business investment and confidence remain weak.

The UK economy has proved more resilient to the Iran war’s economic fallout “than was widely expected a few months ago”, according to Ben Jones, the CBI’s Senior Lead Economist. Jones made the comment in response to the latest GDP figures, with the CBI having separately noted that the economy was “more resilient towards the end of last year than earlier figures implied”.

But the headline resilience masks a more difficult picture underneath. Reuters reported on 23 April 2026 that UK manufacturers’ confidence had plunged to its most negative reading since the start of the COVID-19 pandemic, with firms pointing to the Iran conflict as a factor alongside renewed supply-chain pressure and rising costs. A subsequent CBI survey cited in Reuters on 23 July 2026 found factory orders remained weak and cost pressures had increased further.

The CBI has consistently linked subdued business investment to weak demand, high labour and energy costs, and policy uncertainty — pressures that aren’t going away simply because headline growth has held up.

For Kent, the picture is indirect but real. Businesses in the county exposed to manufacturing, logistics and port-related trade face the same cost and confidence squeeze the CBI describes nationally. If uncertainty over energy prices, supply chains and policy persists, local employers may pull back on investment decisions — and that feeds through to hiring and wages. No Kent-specific output or jobs figures were available to verify the precise local scale of the effect.

So the data tells two stories at once: a UK economy that has absorbed an external shock better than feared, and an underlying business environment that remains fragile. Whether that resilience holds — or whether cost pressures and weak confidence eventually drag on growth — the figures don’t yet answer.