Prime Minister Keir Starmer has delivered a grim update on the economic impact of the Iran war, warning that higher prices and disruption to travel and shopping habits will persist. In an interview on the Cathy Newman Show on Sky News, Sir Keir said Britons should not panic but acknowledged that the effects of the conflict, including higher prices, 'will go on' even after the Strait of Hormuz is reopened.
Government Response and Supply Chains
The Prime Minister stated that the UK government is doing 'everything we can' to reopen the Strait of Hormuz, a vital shipping route for oil and gas that has been effectively closed by Iran since the US-Israeli bombing campaign began. He noted that a 'military mission' led by the UK and France would provide reassurance to ships once hostilities cease, but this initiative is not expected to begin until the conflict ends.
Sir Keir emphasised that there are 'almost daily meetings' of ministers and officials to manage the crisis. 'At the moment, we're confident about supply,' he said, citing the reopening of a CO2 plant in the North East and assurances from airlines that they have enough jet fuel. However, he added, 'we'll see how long the conflict goes on.'
Impact on Consumers and Travel
The Prime Minister acknowledged that people might need to change their habits, including 'where they go on holiday this year, what they're buying in the supermarket.' He urged the public not to panic but stressed the need to protect British people from the war's impact, noting that the UK chose not to get involved in the conflict.
Tuesday's meeting of the Middle East Response Committee (Merc), attended by senior ministers and representatives from the Bank of England, will address the ongoing fallout. Speaking earlier in Lancashire, Sir Keir said the response to the war 'will define not just this Government but arguably this generation,' adding that the world is 'more volatile and dangerous now than at any other point in my lifetime.'
Oil Prices and Peace Talks
Oil prices hit a near three-week high on Monday as hopes for peace talks between the US and Iran were dashed. US President Donald Trump declared over the weekend that envoys would no longer travel to Islamabad for negotiations due to a lack of progress. Trump extended the ceasefire between the US and Iran indefinitely, but a permanent resolution remains elusive, and the Strait of Hormuz—through which a fifth of the world's shipped oil supplies pass—remains effectively blocked.
Brent crude oil prices rose 2% to around $108 a barrel on Monday, returning to levels seen before the first round of peace talks in early April. Sir Keir reiterated that the government has capped household energy costs until July and frozen fuel duty until September to mitigate the impact on consumers.
