United Kingdom in August 2026: the most important developments in economy
The United Kingdom's economy in August 2026 was dominated by rising energy costs during the Iran war. Inflation rose to 2.9% on August 19, with household energy costs at a three-year high. Petrol prices reached their highest level since the war began, and a forecaster warned of a recession if the Strait of Hormuz stays closed. The energy price cap was set to rise 4%.. The public sector recorded an unexpected deficit of £1.8 billion in July, and the new chancellor is preparing a first budget for the autumn, with tax rises back under discussion.
On August 23 it was reported that hackers linked to Iran were blamed for a cyberattack that shut down a British power plant for four days, and energy companies were put on alert. A separate cyberattack on the country's largest airport group exposed data of 8.7 million customers. BP reported a quarterly profit of $5.7 billion, its highest since 2022, while selling its Gelsenkirchen refinery and a 20% stake in the Manakin gas field; Energean entered exclusive talks to buy BP's assets in Egypt. Shell sold its European onshore renewables business to TotalEnergies, and Exxon was reported to be eyeing Shell's $8 billion US chemicals business.
In technology, Demis Hassabis stepped aside as chief executive of Google DeepMind on August 5, taking an unspecified new role. Anthropic agreed a $45 billion data centre deal with the UK start-up Nscale, and Uber and Wayve received licences for supervised robotaxis in London. The UK and Ukraine signed a military AI deal on August 25. The competition watchdog cleared Paramount's $81 billion merger with Warner Bros. Discovery on condition that HBO Max and Paramount+ are not combined.
On the high street, a 112-year-old department store closed for good, a major supermarket announced nearly 5,000 job cuts with 100 stores facing closure, and 1,200 jobs at Harvey Nichols were at risk. The services sector returned to growth, manufacturing expanded for a ninth month, and Wetherspoon said it will open 11 new pubs before Christmas.
by WorldBrief & Maksim Micheliov | AI-generated summary
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