U.K. Finance Minister Rachel Reeves on Wednesday called for an immediate de-escalation of the war in the Middle East, and sharply criticized the U.S. administration’s handling of it.
Speaking to CNBC’s Sara Eisen at the Invest In America Forum in Washington, D.C., Reeves warned of mounting risks to global economic stability caused by the closure of the Strait of Hormuz.
The U.K. chancellor lambasted the Trump administration’s handling of the conflict, saying that the aims of the war were “not clear,” and had shifted between regime change, protecting partners in the region, and stopping Tehran’s nuclear program.
“I’m not convinced this conflict has made the world a safer place,” Reeves said. “It’s not been clear over the last six weeks what exactly the aim of this conflict is.”
She said the U.K. still has a “very good relationship” with the U.S., but added: “We don’t always have to agree on everything.”
She said there has been a lot of long-term damage done to oil and gas facilities in the Middle East. “Even if this conflict does come to an end tomorrow, there are longer-term impacts,” she added. “Damage has been done.”
On Wednesday, the IMF said the U.K. — which is a net importer of gas — will see the biggest hit to growth out of all the world’s richest economies as a result of the Iran war.
Reeves, who is in Washington to attend the IMF-World Bank spring meeting, expressed confidence that the U.K. can beat that forecast. She said the U.K.’s growth will be higher and inflation will be lower if this conflict comes to an end, “and that can only happen through de-escalation.”
“The best economic policy, not just for the U.K. but globally, is de-escalation and the reopening of the Strait of Hormuz,” she said, reiterating “loud and clear” her call for a return to diplomatic negotiations that had been taking place before hostilities began.
