Iran war casts a pall over UK economic update as stocks tank and oil and gas prices surge

LONDON (AP) — Britain's Treasury chief Rachel Reeves sought Tuesday to paint a rosy picture of the state of the U.K. economy even as oil and gas prices soared and shares tanked in the wake of the fast-evolving Iran war that has cast a pall over the global economic outlook.

Unveiling the latest U.K. economic forecasts compiled by the independent Office for Budget Responsibility, Reeves insisted her policies since the Labour Party returned to power in the 2024 election are bearing fruit.

Though economic growth this year is expected to be lower than predicted at the time of last November's budget at 1.1%, it's set to be higher than anticipated in both 2027 and 2028 at 1.6%. Inflation and borrowing are expected to fall more quickly than previously thought, she added.

“The forecasts today confirm that the choices this government has made are the right ones,” she said.

Reeves had hoped her statement to the House of Commons would be a relatively low-key affair, but economists are warning that the Iran war could upend the forecasts, depressing growth, stoking inflation and increasing debt.

The price of Brent international oil standard has spiked by more than 15% this week to over $80 a barrel, while global gas prices, which the U.K. is particularly reliant on, have nearly doubled. If sustained, both would certainly lead to higher energy bills and prices at the pump, fueling inflation and keeping a lid on growth. The FTSE 100 index of leading British shares was down a whopping 3.7% on Tuesday.

“The conflict in the Middle East is already pushing up oil prices, gas prices and expectations for interest rates,” said Helen Miller, director of the Institute for Fiscal Studies. “It could yet cause more far-reaching economic disruption.”

Reeves started off her speech by acknowledging that the world has become “yet more uncertain” in the past few days following the decision of the United States and Israel to launch strikes against Iran, which saw the death of Supreme Leader Ayatollah Ali Khamenei as well as other members of Iran's leadership. However, she did not announce any tax or spending measures that could cushion any potential blow.

“It is incumbent on me and on this government to chart a course through that uncertainty, to secure our economy against shocks, and protect families from the turbulence that we see beyond our borders,” she said.

Opponents of the government said Reeves was in denial and that the British economy, the world's sixth-largest, remains vulnerable to outside shocks.

Her counterpart in the Conservative Party, Mel Stride, said Reeves has “undermined” the country’s potential with a slew of tax increases since she became chancellor of the exchequer.

“The chancellor has the temerity to suggest that she is creating the conditions for renewed growth," he said.

Britain’s Labour government, which has lost significant support since it won the general election in 2024, has been hoping that 2026 would be the year that it was clear the British economy was on a sounder footing than it has been for years.

Some recent economic indicators have pointed to a pickup in growth in the early part of 2026. Inflation is also set to fall sharply in the coming months, prompting the Bank of England to cut interest rates further. Last month, the bank kept its main rate unchanged at 3.75% and indicated there could be a cut in March.

It's early days, but the Iran war may have put paid to that hope.

Britain's Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street to deliver the Spring Statement in London, Tuesday, March 3, 2026.(AP Photo/Kin Cheung)

A fox runs past the 10 Downing Street door before Britain's Chancellor of the Exchequer Rachel Reeves leaves to deliver the Spring Statement in London, Tuesday, March 3, 2026.(AP Photo/Kin Cheung)

Britain's Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street to deliver the Spring Statement in London, Tuesday, March 3, 2026.(AP Photo/Kin Cheung)

Britain's Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street to deliver the Spring Statement in London, Tuesday, March 3, 2026.(AP Photo/Kin Cheung)

WINDER, Ga. (AP) — A Georgia man whose teenage son is accused of killing two students and two teachers at a high school was convicted of second-degree murder and involuntary manslaughter Tuesday.

Colin Gray also was found guilty of all other charges in the September 2024 shooting at Apalachee High School in Winder, northeast of Atlanta. Gray is one of a number of parents across the country who have been charged after their children were accused in fatal shootings.

He showed little emotion as he watched each juror being polled by the judge. Deputies then handcuffed him behind his back as he stood at the defense table, consulting with his lawyer. He will be sentenced at a later date.

Colin Gray was found guilty of second-degree murder in the deaths of two 14-year-old students, Mason Schermerhorn and Christian Angulo. Georgia law defines second-degree murder as causing the death of a child by committing the crime of cruelty to children. Gray was found guilty of involuntary manslaughter in the killings of teachers Richard Aspinwall, 39, and Cristina Irimie, 53.

Prosecutors said Gray gave his son, Colt, access to a gun and ammunition “after receiving sufficient warning that Colt Gray would harm and endanger the bodily safety of another.”

Colt Gray, who was 14 at the time of the shooting, was indicted on a total of 55 counts, including murder. He has pleaded not guilty and the judge in his case has set a status hearing for mid-March.

Investigators said Colt Gray carefully planned the Sept. 4, 2024, shooting at the school attended by 1,900 students.

He boarded the school bus with a semiautomatic, assault-style rifle in his book bag, the barrel sticking out and wrapped in poster board, investigators said. He left his second-period class and emerged from a bathroom with the gun and then shot people in a classroom and hallways, investigators said.

Colin Gray had given his son the gun as a gift the Christmas before the shooting and allowed him to have access to the gun and ammunition, despite his awareness that his son’s mental health had deteriorated, a prosecutor said.

Colin Gray knew his son was obsessed with school shooters, even having a shrine in his bedroom to Nikolas Cruz, the shooter in the 2018 massacre at Marjory Stoneman Douglas High School in Parkland, Florida, prosecutors said.

Colin Gray listens to his attorney during closing arguments in his trial at Barrow County Courthouse in Winder, Ga., on Monday, March 2, 2026. (Abbey Cutrer/Atlanta Journal-Constitution via AP)

Colin Gray, the father of Apalachee High School shooting suspect Colt Gray, takes the stand during his trial on Friday, Feb. 27, 2026 in Atlanta. (AP Photo/Pool)

Colin Gray, the father of Apalachee High School shooting suspect Colt Gray, listens during his trial, Friday, Feb. 27, 2026, at the Barrow County Courthouse in Winder, Ga. (Hyosub Shin/Atlanta Journal-Constitution via AP)