The UK's economy contracted by 0.1% in April, according to the latest official figures, as the Iran war began to have an impact on businesses.
The Office for National Statistics (ONS) said the fall - the first monthly contraction since August last year - was driven by a decline in output from the key services sector.
Some businesses had cited the conflict in the Middle East as having raised costs and affected turnover, the ONS said.
A slight contraction for April had been predicted by analysts, after the economy saw stronger-than-expected growth in March, as people brought forward spending due to concerns about the war.
In the three months to April, the ONS said the economy grew by 0.7% compared with the previous three month period.
Services output which were particularly hard hit in April included arts and entertainment, sports activities and amusement and recreation activities.
The ONS said that "some of this fall can be attributed to the effects from the conflict in the Middle East, with the cancellation of multiple sporting events in the Middle East affecting the output of UK-based businesses".
It added: "Some manufacturing industries, wholesale, warehousing and support activities for transportation, accommodation and travel agencies stated that the conflict in the Middle East had an impact, in terms of reduced turnover in April 2026."
Responding to the figures, Chancellor of the Exchequer Rachel Reeves said that the war "will have an impact at home".
"Before the conflict in the Middle East, growth was higher than expected and inflation was falling," she said.
"The choices I have made as Chancellor mean our economy is in a stronger position to deal with the costs of the war."
Yael Selfin, chief economist at KPMG UK, said the data "points to renewed fragility in the UK economy".
"The impact of the energy shock is continuing to dampen prospects for a sustained recovery in consumer spending. Households are set to see a significant increase in their energy bills from next month," she said.
"In response, consumers have signalled their intention to cut back on purchases and increase their savings, which will weigh on economic activity."
