Confidence in the UK economy has plummeted amid the ongoing Iran war, with surveys indicating a significant impact on both consumer sentiment and business activity. The GfK consumer confidence index fell by four points to -25 in April, marking its lowest level since October 2023. Businesses are bracing for rising costs, with the S&P Global purchasing managers’ index reporting the largest jump in service sector costs since 1996. More than a quarter of firms expect to raise prices next month, driven largely by increasing energy costs. The Office for National Statistics noted that 40% of businesses reported rising costs for goods or services in March, the highest since December 2022. Economists predict that inflation will rise sharply due to the war's fallout, potentially leading the Bank of England to increase interest rates. Despite these challenges, overall activity in the UK’s services and manufacturing sectors showed unexpected growth, with a balance of 52 in April, indicating resilience amid economic uncertainty.