US War on Iran Deemed a 'Mistake' by Chancellor Reeves
Chancellor Rachel Reeves has stated that the United States made a "mistake" by ending diplomatic negotiations with Iran and engaging in military conflict, expressing broad criticism of the war.
"The best economic policy now, not just for the UK, but globally, is to de-escalate," the chancellor told CNBC's Invest in America forum.
The UK government has declared it will not participate in the US military blockade of the strategic Strait of Hormuz, which aims to increase pressure on Iran.
When asked whether the growing differences between the UK and US over the conflict had affected the "special relationship" between the two nations, Reeves responded negatively but added:
"Friends are allowed to disagree".
This week, the International Monetary Fund (IMF) warned that the US-Israel conflict with Iran could trigger a global recession, with the UK expected to be the most affected among advanced economies.
Reeves expressed skepticism about the conflict's contribution to global safety, noting both immediate and long-term economic consequences due to damage to oil and gas infrastructure in the Middle East.
Energy prices have surged since the conflict began over six weeks ago, leading to a significant decline in traffic through the vital Strait of Hormuz shipping route.
Speaking at the Invest in America Forum in Washington DC, where she attended the IMF's annual conference, Reeves acknowledged sharing the Trump administration's strong opposition to the Iranian regime but emphasized the importance of the method to achieve change.
"Iran did not currently have a nuclear weapon and the best way to stop them was through diplomacy," she said.
"There was a diplomatic channel open, conversations, formal discussions were happening," she added.
"I think it was a mistake to end those and to enter into conflict, because I'm not convinced that we are safer today than we were a few weeks ago," Reeves stated.
She noted the lack of clarity over the past six weeks regarding the US's objectives in the conflict, whether it was to induce regime change, halt Iran's nuclear program, or encourage diplomatic negotiations that were already underway.
The US has recently emphasized reopening the Strait of Hormuz to shipping to facilitate oil and gas exports.
"If that's the aim, well it was open a few weeks ago," Reeves said.
She mentioned that UK Prime Minister Sir Keir Starmer and French President Emmanuel Macron planned to host talks on Friday to discuss facilitating navigation through the Strait of Hormuz in the event of a "proper ceasefire."
"We are ready to play our part. But the Strait of Hormuz was open, there was no tolling, a few weeks ago," she added.
Despite her critical stance, Reeves affirmed the strength of the US-UK relationship and highlighted the forthcoming visit of the King as a positive sign.
However, in a separate interview with , President Trump responded ambiguously when asked about the "special relationship":
"With who?"
When pressed further, Trump remarked:
"It's been better, but it's sad. It's the relationship where when we asked them for help, they were not there. When we needed them, they were not there. And we gave them a good trade deal. Better than I had to. Which can always be changed."
In its latest World Economic Outlook, the IMF reduced its UK growth forecast for this year to 0.8%, down from 1.3% in January before hostilities began.
Reeves acknowledged the conflict's significant impact on the UK, a net importer of gas, stating:
"Our growth will be higher and inflation will be lower if the conflict comes to an end."
"We beat the forecasts for the UK economy last year. I'm confident we'll beat them again."
Reeves Expresses Frustration Over US War Strategy
On Tuesday, Reeves told the Mirror she felt "very frustrated and angry that the US went into this war without a clear exit plan, without a clear idea of what they were trying to achieve."
She attributed her frustration to the economic impact on UK families and businesses.
US Treasury Secretary Scott Bessent earlier told the BBC that a "small bit of economic pain" was acceptable for long-term international security.
Bessent expressed less concern about the economic consequences than about the threat Iran posed to global security, stating that US and Israeli actions had eliminated the "tail risk" of Iranian nuclear strikes against Western countries.
The UK government has stated there is "no assessment" that Iran is attempting to target Europe with missiles.
Additional reporting by Jemma Crew.
