War in Middle East could wipe out growth in UK living standards'

"The UK's reliance on gas from the Middle East makes it especially vulnerable to an effective blockade of the strait of Hormuz, through which about 20% of the world's liquid natural gas is transported. According to the thinktank's calculations in its analysis of Tuesday's spring forecast, living standards for typical working-age households are on track to grow by 300 over the next year, or 0.9%."

"We have called for the government to develop the infrastructure for a social tariff. Targeting people with high energy needs and low levels of income. Liz Truss showed us that if you try to support people across the board, that is very expensive. There is pressure from right and left on the government who say why are we worrying about [borrowing levels] and tightening our belts?"

"This kind of government support is a key reason that debt has been rising in recent years. And, partly because bad shocks keep coming along, and partly because the government has had to respond to them with significant spending commitments."

The Resolution Foundation warns that Middle East conflict could reverse anticipated living standard improvements in the UK through energy price shocks. UK households were projected to see £300 annual growth in living standards, with lower-income households experiencing larger gains. However, disruption to Middle East energy supplies, particularly through the Strait of Hormuz where 20% of global liquid natural gas transits, threatens this outlook. The UK's gas reliance makes it especially vulnerable. The thinktank recommends targeted social tariffs protecting low-income households rather than broad support packages, citing the £35 billion cost of Liz Truss's universal energy support following Russia's Ukraine invasion.

Read at www.theguardian.com