UK Chancellor of the Exchequer John Healey has issued a stark warning that the ongoing US-Israeli aggression against Iran is placing mounting pressure on the British economy and government finances, threatening to upend the October Budget, State media reports.

“What is happening in the Middle East is hitting inflation, it is hitting growth, it is hitting borrowing costs,” Healey told the Financial Times, acknowledging that the war is compounding an already fragile economic landscape.

The warning came as government borrowing spiked sharply earlier this week, sending a clear signal that financial markets are increasingly jittery over the inflationary consequences of the escalating conflict in West Asia.