Rachel Reeves set to meet US counterpart after he said 'small bit of economic pain' was worth Iran war

The conflict in the Middle East, which has triggered a worldwide economic shock and driven energy costs sharply higher, is expected to dominate proceedings at the influential financial institution.

Mr Bessent has argued that temporary economic hardship is an acceptable price for eliminating the threat of a nuclear-armed Tehran.

Meanwhile, the Chancellor has publicly expressed her anger at what she termed an American "folly" in the Middle East, criticising the financial consequences now being felt by British families.

Their meeting comes amid a fragile ceasefire and ongoing diplomatic efforts to resolve the standoff.

The Treasury Secretary defended the surge in prices affecting consumers worldwide, stating that "a small bit of economic pain for a few weeks is worth taking off the incalculable tail risk of either a nuclear Iran or a nuclear Iran that uses that weapon".

He also expressed confidence that the disruption would prove short-lived.

"There is nothing more transient than what we are seeing now," he said, predicting that once hostilities conclude, costs would fall across the board.

"So the conflict will end, prices will come down, and then headline inflation will come down, and with that, gasoline prices will come down," he added.

His remarks came as Iran's nuclear programme remained the central obstacle in negotiations, with weekend talks between Washington and Tehran breaking down.

Ms Reeves made her frustration clear before departing for the United States, telling the Mirror: "I feel very frustrated and angry that the US went into this war without a clear exit plan, without a clear idea of what they were trying to achieve."

The Chancellor emphasised that the economic fallout was being felt by ordinary households both in Britain and across the globe.

Her criticism places her at direct odds with the Trump administration's position that the blockade of Iranian ports was necessary to counter what the President has characterised as blackmail and extortion by Tehran over control of vital shipping lanes.

The IMF cut its growth forecast for Britain ahead of the Chancellor's visit, warning that a severe scenario could bring the global economy close to recession.

Bank of England Governor Andrew Bailey offered a more reassuring assessment, stating that the UK was better positioned to weather the storm thanks to a robust banking system strengthened following the financial crisis.

President Trump indicated that fresh negotiations with Iran could take place within the next two days, saying he believed Tehran was eager to reach an agreement.

Meanwhile, Sir Keir Starmer is working to coordinate international efforts to keep the Strait of Hormuz open to shipping once fighting ends.

The waterway carries approximately one-fifth of global oil and gas supplies, and its effective closure by Iran has pushed up costs for fuel, food and essential goods.