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Chancellor Rachel Reeves has openly criticized the United States’ decision to end diplomatic engagements with Iran and escalate to military conflict, describing it as a “mistake.” Speaking at CNBC’s Invest in America forum, Reeves emphasized that the most prudent economic approach for the UK and the world is to seek de-escalation rather than intensifying tensions.
Despite the growing discord between the UK and US regarding their responses to the conflict, Reeves maintained that the longstanding “special relationship” between the two countries remains intact, though she acknowledged that “Friends are allowed to disagree.” The UK government has made clear it will not participate in the US-led military blockade of the crucial Strait of Hormuz, a strategic move intended to increase pressure on Iran.
Reeves expressed concern about the conflict’s wider consequences, warning that the damage inflicted on Middle Eastern oil and gas infrastructure will lead to prolonged global economic challenges. The war, which has pushed energy prices sharply upward since it began over six weeks ago, has also caused a significant drop in shipping traffic through the Strait of Hormuz. Reeves highlighted that while she shares the US administration’s disapproval of the Iranian regime, she argued that diplomacy is the preferable means to prevent Iran from achieving nuclear capabilities. She noted, “There was a diplomatic channel open, conversations, formal discussions were happening,” and criticized the decision to abandon these in favor of confrontation.
Regarding the objectives behind the US’s involvement, Reeves pointed out a lack of clarity throughout the recent weeks—whether the aim was regime change, halting Iran’s nuclear programme, or resuming diplomatic talks already in progress. She observed that the US has recently emphasized reopening the Strait of Hormuz to resume the flow of oil and gas exports, adding, “If that’s the aim, well it was open a few weeks ago.” To this end, she noted upcoming discussions hosted by UK Prime Minister Sir Keir Starmer and French President Emmanuel Macron about maintaining safe navigation through the strait, contingent upon achieving a “proper ceasefire.” Reeves concluded by reaffirming the UK’s readiness to contribute to stabilizing this critical route.
The chancellor also addressed the broader UK-US relationship, underscoring its strength despite current disagreements. She pointed to the anticipated visit of the King as evidence of ongoing good ties. However, former US President Trump expressed frustration with the relationship, stating, “It’s the relationship where when we asked them for help, they were not there. When we needed them, they were not there.” Trump claimed the US offered the UK a favorable trade deal in return, which could be renegotiated. Meanwhile, the IMF recently downgraded its forecast for UK economic growth in 2026 from 1.3% to 0.8%, largely attributed to the fallout from the conflict. Reeves acknowledged the war’s strain on the UK economy, given the nation’s dependence on gas imports, but remained optimistic, saying, “We beat the forecasts for the UK economy last year. I’m confident we’ll beat them again.”
Earlier this week, Reeves described feeling “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,” highlighting concern for the economic impact on British families and businesses. In contrast, US Treasury Secretary Scott Bessent conveyed to the BBC that a “small bit of economic pain” is justified by long-term international security benefits, emphasizing that US and Israeli actions have reduced the “tail risk” of Iranian nuclear aggression against Western nations. The UK government, meanwhile, stated it has found “no assessment” indicating that Iran currently intends to target Europe with missiles
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