Middle East crisis could push UK inflation back up to 3%, says OBR

Economists say likelihood of drawn-out US-Israeli war with Iran could stoke inflationary pressures in Britain and around the world. Photograph: Neil Hall/EPA

UK inflation could end the year higher than previously expected at 3% because of the US-Israel war in Iran, the government’s economics watchdog has said.

David Miles, a senior figure at the Office for Budget Responsibility (OBR), said inflation could end the year a percentage point higher than expected before the war, because of the energy price shock triggered by the crisis in the Middle East.