UK economy faces recession if strait of Hormuz remains closed, EY warns - as it happened

Rolling coverage of the latest economic and financial news

The yen has hit its highest level in three months after Japan and the US launched a combined operation to support the Japanese currency.

The yen strengthened to ¥155 to the US dollar on Monday, its highest level since early May, after Tokyo and Washington confirmed they had carried out a rare joint currency intervention late last week.

They have a weakening yen, and they wanted a little bit of help. And we’re always there for Japan.”

We expect the sector to endure a difficult period in the latter half of this year. The conflict in the Middle East is the key wildcard, but the breakdown of the ceasefire has led to a resurgence in both oil and gas prices and increased business uncertainty. Higher energy prices will filter through into higher business costs while demand will be hit by the squeeze on disposable incomes from rising inflation and weakening wage growth.

Output price inflation cooled to a four-month low in July, with manufactures noting that an easing of supply chain tensions had slowed the rise in input costs. However, just as with the wider economy, we anticipate that this relief will be temporary. The impact of the recent rise in oil and gas prices, along with indirect effects of higher energy costs, will push up goods prices, although the inflation outlook is highly dependent on the situation in the Middle East.”