// BBC BUSINESS NEWS — FINANZA
What we now know about the UK economy in four charts
The UK may have no involvement in the US-Iran war, but the country is feeling the full force of the conflict on its economy.
Soaring energy prices are set to dent growth in the short term, push up inflation and leave living standards in a "grim" place, according to the latest official forecast from the Office for Budget Responsibility (OBR).
Interest rates are also predicted to rise, making borrowing more expensive, along with government debt repayments.
Chancellor John Healey warned the nation faces "real challenges ahead" as he announced policies that he said would offer "breathing space" for households in the coming months.
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"What we face today are global economic storms," he said. "We can't wish them away. We must choose the course we steer through them."
In its first assessment of the UK economy since the Middle East conflict started, the OBR said rising energy prices were the biggest risk to the economy in the near future.
Despite raising its growth forecast for this year, it sharply cut its prediction for next year from 1.6% to 1%.
Growth is then set to rebound in the following years.
When an economy grows, businesses tend to invest more, create more jobs and give pay rises to workers, which leaves people feeling better off on average, though it can take time and not everyone necessarily benefits.