Prime Minister Sir Keir Starmer has cautioned that the longer the US-Israeli conflict with Iran continues, the greater the impact on the UK economy will be. Speaking amid rising oil prices and market turbulence, Starmer acknowledged that businesses and others are concerned and must monitor developments closely.
Chancellor Rachel Reeves held a call with G7 finance ministers to discuss surging oil prices, which have exceeded $100 per barrel for the first time in four years. The AA warned drivers to consider cutting non-essential journeys as fuel prices are expected to rise, with unleaded likely to reach 140p per litre and diesel 160p.
Starmer stated that the energy price cap would protect households from immediate shocks, but economists warn that the government's fiscal headroom could be eroded by sustained energy price increases. The prime minister noted that the UK economy is more resilient than in 2022, with inflation at 3% and falling, but faces pressure from unions and backbenchers to prepare a support package.
On the special relationship with the US, Starmer confirmed that US forces are using UK airbases in operations related to Iran, and intelligence cooperation continues daily. He emphasised that decisions about Britain's best interests are for the UK prime minister alone, a fundamental principle.
