Chancellor Rachel Reeves has used the International Monetary Fund spring meetings in Washington to call for stronger global economic cooperation as the Iran war drives up energy prices and threatens a worldwide recession. Speaking at a CNBC conference just steps from the White House, she described the conflict as a “mistake” and a “folly” that has not made the world safer.
Addressing finance ministers and central bank governors, IMF managing director Kristalina Georgieva said some countries were “in panic” and urged a swift end to the war. The fund has warned that the conflict could tip the global economy into recession, with Britain set to be the worst-hit G7 nation. Higher energy costs – the most severe shock since the 1970s – are already squeezing households and businesses, hitting the most vulnerable hardest.
Reeves, who met US Treasury Secretary Scott Bessent separately, stressed that British families and firms are feeling the pain from price rises triggered by the war. While she described the meeting as cordial, her public criticism of US policy marked a sharp departure from the usual diplomatic tone of such gatherings. One global financier noted how “vocal” she had been compared to earlier private disagreements between Bessent and ECB President Christine Lagarde.
The transatlantic tension was a key topic at a British embassy cocktail party attended by Bank of England Governor Andrew Bailey and Barclays CEO CS Venkatakrishnan. Former UK foreign secretary David Miliband observed that many at the meetings were discussing “how you hedge against American decisions” as the world’s pre-eminent superpower pursues a war that many allies oppose. With King Charles’s state visit to the US looming, the rift over Iran underscores the challenge of maintaining global cooperation without Washington’s full engagement.
