Prime Minister Sir Keir Starmer has said the government will explore “every lever” available to mitigate the economic impact of the US-Israel war against Iran, as experts warn the conflict could prolong the cost of living crisis for months. Starmer will chair a Cobra meeting on Monday afternoon with key ministers and Bank of England Governor Andrew Bailey to discuss contingency measures.
Speaking during a visit to a school in London, Starmer said the meeting would focus on the economic fallout, including soaring energy prices and rising government borrowing costs. “Cobra is the opportunity at the highest level to bring people together on matters of real, significant national importance,” he said. “I am asking for every lever that’s available to the government to deal with the cost of living to be discussed.”
Downing Street downplayed expectations of immediate financial support for households, saying discussions would instead focus on assessing the economic impact, preventing fuel shortages, and pressing regulators to stamp out profiteering. Economists have warned the conflict could trigger an economic shock similar to the 1970s oil price crisis or the effects of Russia’s invasion of Ukraine.
Iran has blocked the Strait of Hormuz, a key route for oil and gas shipments to Europe, in response to US-Israeli strikes. However, US President Donald Trump extended his deadline for Iran to allow free shipping by five days, claiming “very good and productive conversations” on ending the conflict. No 10 welcomed any breakthrough, with Starmer’s spokesperson saying “swift resolution to the war is in global interests.”
Starmer spoke with Trump on Sunday night in a 20-minute call described as constructive. The UK has distanced itself from the conflict, refusing the US permission to use UK air bases for the initial attack, a move that has annoyed Trump. Polling shows the war is unpopular with the British public.
