Chancellor Rachel Reeves has criticised the United States over the economic fallout of the war with Iran, warning that British families could be £480 worse off this financial year. In an interview with The Mirror, she expressed frustration and anger at what she called the 'folly' of launching a conflict without a clear exit plan.
The Resolution Foundation think-tank estimated that the average UK household could lose £480 over the current financial year due to the conflict. Reeves said she did not recognise the figure but assured that the government would keep a 'close eye' on gas and electricity prices. The war has led to the closure of the Strait of Hormuz, through which 20% of the world's oil previously passed, causing energy prices to spike.
'This is a war that we did not start. It was a war that we did not want,' Reeves told The Mirror. 'I feel very frustrated and angry that the US went into this war without a clear exit plan.' She added that the government is hosting a conference with French President Macron on securing passage through the Strait of Hormuz, and reiterated the UK's stance of de-escalation rather than involvement in the US blockade.
Reeves highlighted that energy bills fell by around £117 earlier this month due to the price cap, but warned of potential surges in summer and autumn. The government is prepared to protect the most vulnerable households if needed, but Reeves ruled out universal support similar to that introduced by Liz Truss in 2022, arguing that targeted support is more effective and avoids long-term economic damage.
The Chancellor also criticised the Conservatives and Reform UK for wanting to 'jump in feet first' into the conflict. She stressed that while no sensible person supports the Iranian regime, starting a war without clear objectives or an exit strategy is a 'folly' affecting families in the UK and worldwide. Prime Minister Keir Starmer made the right decision to keep Britain out of the conflict, she said.
