UK inflation likely to rise because of Middle East war, says Rachel Reeves

"I will take the necessary decisions to help families with the cost of living and protect the public finances. I am clear-eyed about my response to the current situation. My economic approach will both be responsive to a changing world and responsible in the national interest."

"Both Rachel Reeves and the prime minister, Keir Starmer, suggested the government would be prepared to intervene to protect UK households against major cost-of-living shocks as oil prices surged past $100 a barrel for the first time since 2022."

"Ministers are understood to be looking at ways to potentially mitigate the rising costs on energy bills and are likely to come under pressure to cancel a planned 5p rise in fuel duty this autumn."

Britain faces rising inflation threats from escalating US-Iran tensions as oil prices exceed $100 per barrel for the first time since 2022. Chancellor Rachel Reeves and Prime Minister Keir Starmer indicated the government stands ready to protect households from major cost-of-living shocks. The Treasury is exploring mitigation measures including potential cancellation of a planned 5p fuel duty increase and coordinated release of International Energy Agency oil reserves. Special consideration is being given to families reliant on heating oil outside the energy price cap. Petrol forecourt operators have been warned against price gouging, with pump prices already rising significantly—petrol up 5p to 137.5p and diesel up 9p to 151p per litre.

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