“US War on Iran Was a ‘Mistake’,” Says Chancellor Reeves Amidst Growing Economic Fears

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Chancellor Rachel Reeves has launched a scathing critique of the United States’ decision to abandon diplomatic negotiations with Iran in favour of military conflict, labelling it a “mistake.” Speaking at CNBC’s Invest in America forum, Reeves emphasized that “the best economic policy now, not just for the UK, but globally, is to de-escalate,” as warnings mount about the conflict’s potential to trigger a global recession.

The UK government has made it clear it will not participate in the US’s military blockade of the vital Strait of Hormuz, a move designed to exert further pressure on Iran.

Read also: Pakistan Bridges US-Iran Dialogue Amid Rising Regional Tensions

Reeves Criticises US Strategy and Objectives

Reeves, while sharing the Trump administration’s strong disapproval of the Iranian regime, questioned the effectiveness and clarity of the US’s approach. “There was a diplomatic channel open, conversations, formal discussions were happening,” she stated. “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.”

She highlighted the lack of clear objectives from the US over the past six weeks, questioning whether the aim was regime change, ending Iran’s nuclear programme, or diplomatic negotiations – which were already underway. Reeves pointed out the irony of the US now focusing its rhetoric on reopening the Strait of Hormuz, noting, “If that’s the aim, well it was open a few weeks ago.”

The Chancellor firmly believes that Iran does not currently possess a nuclear weapon and that diplomacy remains the most effective path to prevent its development.

Economic Fallout and Global Recession Warnings

The International Monetary Fund (IMF) has issued a stark warning that the US-Israel war with Iran could plunge the global economy into recession, with the UK anticipated to be the hardest hit among advanced economies. Energy prices have soared since the conflict began over six weeks ago, leading to a significant reduction in traffic through the crucial Strait of Hormuz shipping route and causing extensive damage to oil and gas facilities in the Middle East.

Reeves expressed deep concern over the immediate and long-term economic pain, telling the Mirror she was “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,” primarily due to the impact on UK families and businesses.

The IMF has already cut its estimate for UK growth this year to 0.8%, down from 1.3% before hostilities commenced. As a net importer of gas, the UK is particularly vulnerable. “Our growth will be higher and inflation will be lower if the conflict comes to an end,” Reeves acknowledged, though she expressed confidence in the UK economy’s ability to outperform forecasts.

Read also: US-Iran Tensions: Trump Signals Preference for Deal Amidst Port Blockade and War Claims

The “Special Relationship” Strained

Despite her outspoken criticism, Reeves maintained that the US and UK still share “a very good relationship,” referencing the upcoming visit of the King. However, President Trump offered a different perspective when asked about the “special relationship” by Sky News, responding “With who?” and adding that it had “been better, but it’s sad.” He accused the UK of not being “there when we needed them” and even threatened to change a “good trade deal” he had given them.

Meanwhile, UK Prime Minister Sir Keir Starmer has affirmed he is “not going to yield” to pressure from Trump regarding the Iran war.

Conflicting Views on Security and UK’s Role

Reeves asserted she was “not convinced that this conflict [had] made the world a safer place.” In contrast, US Treasury Secretary Scott Bessent told the BBC that a “small bit of economic pain” was a worthwhile price for long-term international security. Bessent argued that US and Israeli actions had removed the “tail risk” of Iranian nuclear strikes against Western countries.

However, the UK government has stated there is “no assessment” that Iran is attempting to target Europe with missiles.

Reeves confirmed that UK Prime Minister Sir Keir Starmer and French President Emmanuel Macron would be hosting talks on Friday to discuss how to facilitate navigation through the Strait of Hormuz in the event of a “proper ceasefire,” underscoring that the UK is “ready to play our part.”

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