Rachel Reeves has issued a stark inflation warning amid fears the war in the Middle East will spark another cost-of-living crisis in the UK with fuel prices set to soar.
The chancellor told the Commons in a statement on Monday: “The economic impact of the situation in the Middle East will depend on its severity and its duration. The movements that we have already seen are likely to put upward pressure on inflation in the coming months.”
As the price of oil soared above $100 a barrel for the first time since 2022, AA president Edmund King urged drivers to cut out “non-essential journeys”.
American president Donald Trump has insisted that a surge in fuel costs is a “small price to pay”, after the US and Israel launched airstrikes towards Iran last Saturday, sparking widespread regional conflict.
On Monday, Sir Keir Starmer warned that the longer the conflict with Iran goes on, “the more likely the impact on our economy”.
Key Points
- Reeves tells Commons Middle East conflict likely to push inflation up in coming months
- Chancellor insists she is taking action on fuel prices
- Reeves vows to families April price cap 'will not change'
- G7 to hold an emergency meeting on soaring oil prices
Greek-operated tanker sails through Strait of Hormuz
22:00 , Bryony GoochA Greek-operated oil tanker has sailed through the Strait of Hormuz with a cargo of Saudi Arabian crude and its destination listed as India, analysis from ship tracking platforms Kpler and Lloyd's List Intelligence showed on Monday.
Hundreds of ships remain anchored on both sides of the strait amid the US-Israel war with Iran, with oil and shipping markets looking for any indication of sailings picking up through the critical waterway through which much of the world's oil passes.
The Shenlong Suezmax tanker, with a capacity of one million barrels, loaded crude in the Saudi port of Ras Tanura, separate ship tracking data on the MarineTraffic platform showed.
UK gas supplies are 'ample' says energy minister Lord Whitehead
21:17 , Rebecca WhittakerJet fuel reserves in the UK are “considerable” and gas supplies “ample”, energy minister Lord Whitehead has said.
Making a statement on energy markets, Lord Whitehead said: “The UK has considerable reserves of jet fuel – doesn’t have the same reserves of heating oil, and indeed, we have taken action just today in terms of making sure that we have written to the CMA (Competition and Markets Authority) and to the industry leaders in the heating oil industry to make sure that they keep a cap on prices, that they’re not price gouging, that they are keeping their prices as modest as they can.”
The minister later said: “The UK has ample supplies of gas of all sorts, 50% from UK fields, assuming it stays in the country.”
Lord Whitehead added LPG vessels were “on their way to the UK”.
He said: “It’s not so much about supply, it’s about price and what will happen if the war continues for a long time on price.
“For example, as far as LPG is concerned, we only take about 1% of our gas in the form of LPG from Qatar – very small supplies. Most of it comes from other sources.
“But there are other forces in the world that are trying – literally trying – to turn LPG vessels around to go to their parts of the world, to supply at an increasingly high price LPG for them.”
Recap: What's happening to petrol and diesel prices?
21:00 , Bryony GoochThe cost of crude oil can have a significant effect on wholesale fuel prices, which is sending costs at the petrol pumps sharply higher.
The RAC said the average price of a litre of petrol at UK forecourts was 137.5p on Sunday after rising nearly 5p since February 28 when the conflict in the Middle East started.
Average diesel prices were up almost 9p over the same period to 151p.
Think tank the Energy and Climate Intelligence Unit said its analysis of the historic link between oil and fuel prices shows oil trading at 100 dollars a barrel means petrol prices could hit about 150p per litre, while oil hitting 120 dollars a barrel means petrol prices of about 170p per litre.
RAC head of policy Simon Williams said last weak that oil prices would “have to rise significantly and stay that way for some time to have a dramatic effect”.
Other experts suggested that motorists could see price rises happen gradually for both petrol and diesel.
Why a Royal Navy ship still hasn’t reached Cyprus after Iran strike
20:00 , Bryony Gooch
Why a Royal Navy ship still hasn’t reached Cyprus after Iran strike
Recap: What’s happening to gas and oil prices?
19:00 , Bryony GoochA major impact of escalating conflict in the Middle East is on the world’s oil and gas supplies.
Prices have been climbing higher amid concerns that the fighting is disrupting supply and limiting the ability to transport to countries around the world.
This is because Iran has effectively blocked commercial ships from passing through the Strait of Hormuz, leading traffic through the waterway to reach a near-standstill, according to reports.
The Strait of Hormuz is a crucial shipping route, used by tankers carrying about one fifth of the world’s oil supplies and seaborne gas.
The price of Brent crude – a global benchmark for oil produced from the North Sea – has shot passed 100 dollars a barrel to reach levels not seen since the summer of 2022.
Natural gas prices have also been soaring after Qatar’s state-backed energy company QatarEnergy last week said it had halted production of liquified natural gas because of attacks on its facilities.
Defence Secretary says UK's preparations ahead of US-Israeli strikes made a 'real difference
18:08 , Rebecca WhittakerDefence Secretary John Healey has told MPs that the UK’s preparations ahead of the initial US-Israeli strikes has made a “real difference”.
He said: “Since January, we’ve moved significant military assets into the region ahead of those first US-Israeli strikes and those preparations made a real difference.
“It meant we’ve conducted defensive military operations from day one, our F-35s destroying Iranian drones over Jordan, our typhoons shooting down targets heading to Qatar, our counter-drone units defeating further attacks against coalition bases in Iraq.
“We acted early to protect British people and British interests and to support our allies.”
Iran foreign minister warns 'many surprises in store' as oil prices continue to soar
18:00 , Bryony GoochIranian foreign minister Abbas Araghchi has warned that Iran has “many surprises in store” as the price of oil continues to increase.
Tehran’s regime has closed the Strait of Hormuz as the US carries out airstrikes against them.
He said: “9 days into Operation Epic Mistake, oil prices have doubled while all commodities are skyrocketing. We know the US is plotting against our oil and nuclear sites in hopes of containing huge inflationary shock.
“Iran is fully prepared. And we, too, have many surprises in store.”
9 days into Operation Epic Mistake, oil prices have doubled while all commodities are skyrocketing. We know the U.S. is plotting against our oil and nuclear sites in hopes of containing huge inflationary shock. Iran is fully prepared.
— Seyed Abbas Araghchi (@araghchi) March 9, 2026
And we, too, have many surprises in store. pic.twitter.com/UNQu0fVZE2
The UK is paying for decisions made by the Tories and Lib Dems, Rachel Reeves said
17:48 , Rebecca WhittakerBritain is paying a “high price” for decisions made by the Conservative Party and Liberal Democrats when they were in power, Rachel Reeves has said.
The Chancellor was responding to Liberal Democrat Treasury spokeswoman Daisy Cooper who criticised Ms Reeves for not having a “single concrete announcement” in her speech.
Ms Cooper had said the Chancellor’s statement “won’t provide the reassurance that households and small businesses are looking for as they hear the reports of energy bills about to escalate”.
Ms Reeves replied: “She has never once acknowledged her party’s failure when they were in government.
“In 2010 her party’s leader Nick Clegg justified opposing new nuclear energy on the grounds that it would take until 2022 to become operational.
“Well 2022 has been and gone, but what is here, is another example of Britain paying the high price today for the choices of the parties opposite.”
Reeves urged shadow chancellor not to 'scaremonger' about energy bills
17:40 , Rebecca WhittakerChancellor Rachel Reeves urged shadow chancellor Sir Mel Stride not to “scaremonger” about energy bills as she said the Labour Government is “backing Britain’s energy security”.
Ms Reeves said: “Commitment to greater energy security can help guard against shocks.
“And after inaction and delay from the Conservatives when they were in government for 14 years, this Labour Government is committed to investing and building new nuclear, and that’s why we’re backing Sizewell C and also small modular reactors, both funded at the spending review, neither funded by the previous government, because this Government is backing Britain’s energy security.
“This Labour Government is backing the industries of the future, such as carbon capture and storage, funded at the spending review, not funded by the party opposite, because we back Britain’s energy security.
“And through the National Wealth Fund, we are investing in floating offshore wind and in our docks, funded in the spending review, not funded by the party opposite, because we back Britain’s energy security.”
She added: “On energy bills, I would urge (Sir Mel Stride) not to scaremonger. The £150 cut to energy bills that I announced in the Budget will continue, as confirmed by Ofgem. We removed the failed Eco scheme, and we removed a number of levies off of bills.
“On heating oil, those conversations will happen this week, and we are working closely with MPs, with colleagues in Northern Ireland to make sure that things are working well.”
Watch: Rachel Reeves warns US-Iran war likely to cause rise in inflation
17:38 , Rebecca WhittakerMiliband warns heating oil industry against price gouging
17:35 , Rebecca WhittakerPolitical reporter, Athena Stavrou, reports:
Ed Miliband has written to the heating oil industry to warn them against price gouging amid concerns the Middle East war will spark a global fuel crisis.
The energy minister met with heating oil bosses on Friday and Monday morning, and raised concerns about the “significant increases in heating oil prices seen across the UK” since the outbreak of war.
He said that while he “recognised the work” the industry was doing in “difficult market conditions”, he made clear “the Government will take all action necessary to protect households”.
“The Minister for Energy has today spoken to the CMA who will now gather evidence on the situation in the market and look at whether consumers are being treated fairly,” the letter read, “We will be talking to them again in the coming days and they have the power to launch an investigation into anything relating to unfair contract terms, misleading consumer practices or anticompetitive behaviour.
Where there is evidence that consumers are being treated unfairly, we will act accordingly and ensure that the appropriate regulatory bodies are engaged.”
Jeremy Hunt claimed it is 'too early' to know if Reeves will need to offer an energy prices rescue package
17:25 , Rebecca WhittakerJeremy Hunt has claimed it is “too early to know” whether Rachel Reeves will need to offer an energy prices rescue package.
The former chancellor drew comparisons with his time in the Treasury during the Russian invasion of Ukraine.
He said: “When I was doing her job the Treasury rule of thumb was that a 20% increase in energy prices meant 1 per cent more on inflation and 0.5 per cent less on growth.
“The truth is it is much too early to know whether she is going to have to find £78 billion to help households with energy bill as I had to in 2022.”
Ms Reeves replied: “I think this point about it being too early to tell the impact is really important.
“Of course we will take the necessary actions to protect consumers and businesses, but the most important thing we can do at the moment is to deescalate the conflict and work with Lloyds of London and countries around the world to get those vessels flowing through the Strait of Hormuz.”
Treasury will fund the net additional costs of operations in the Middle East
17:19 , Rebecca WhittakerThe Treasury will fund the net additional costs of operations in the Middle East, not the Ministry of Defence, Chancellor Rachel Reeves told the Commons.
In a statement, she told MPs: “I am proud to be the Chancellor that is delivering the biggest uplift in defence spending since the end of the Cold War, and I am committed to giving our military the resources that they need.
“That is why I can confirm today that I approved access for the Ministry of Defence to the special reserve to deploy additional capabilities in the Middle East, meaning that no net additional costs of these operations will be funded by the MoD, but instead will be funded by the Treasury.”
She also said the Government’s response to John Fingleton’s Nuclear Regulatory Review would be published “in the coming days”.
Ms Reeves said she “will not tolerate any company exploiting the current crisis to make excess profits at consumers’ expense”, as she sought to reassure MPs and their constituents over concerns of rising prices.
Rachel Reeves’ 'mismanagement' has left the UK 'more vulnerable' claims Sir Mel Stride
17:17 , Rebecca WhittakerRachel Reeves’ decisions have left the UK “more vulnerable” to the economic impacts of the conflict in the Middle East, according to Shadow chancellor Sir Mel Stride.
“Her gross mismanagement has left us far more vulnerable than would otherwise have been the case,” Sir Mel said.
“Inflation was bang on target when we left office, but thanks to (the Chancellor’s) choices, it rose back up to almost 4 per cent last year, the highest in the G7 – and inflation remains elevated. That is far from ideal, given the threat of a significant further spike in energy prices.
“And of course, extraordinarily, the Chancellor has just now reconfirmed that the Government will press ahead with a rise in fuel duty later this year.
“And borrowing is running higher than was forecast when the Government took office. We are spending well over £100 billion a year on debt interest alone. That leaves us far more vulnerable to rising borrowing costs.
“And the Government, of course, is continuing to impose ruinously high taxes on our oil and gas sector and choosing to rely on imports, instead of maximising our own domestic energy supply. That is proving to be an incredibly short-sighted approach, but as (the Chancellor) has just told us, there will be no change in direction. That is the wrong choice.”
Chancellor insists she is taking action on fuel prices
17:02 , Tara CobhamChancellor Rachel Reeves said she is “taking action to ensure that people pay the lowest possible price at the pump”, amidst the ongoing conflict in the Middle East.
She also promised MPs would get a meeting focused on heating oil prices.
In a statement to the Commons on the Middle East, she said: “I recognise that households who use heating oil face unique challenges, and so I have asked the Financial Secretary to the Treasury to lead discussions with officials and with rural and Northern Irish MPs to explore further action that we can take, and those meetings will happen on Wednesday.”
Ms Reeves pointed to cuts in fuel duty, adding: “I am also taking action to ensure that people pay the lowest possible price at the pump.”
“The new cheap fuel finder that I confirmed at the budget is currently being delivered, helping consumers find the cheapest price for their fuel. Almost 90 per cent of petrol retailers have already registered for this and last week, I instructed my officials to accelerate the integration of the cheaper fuel finder with map applications.
“This week, I am meeting with petrol forecourt operators, and I will not hesitate to call out retailers who fail to provide data to the fuel finder. I am clear that the best way to keep prices at the pump low is rapid de-escalation, and I will continue to monitor prices as the situation develops.”
No country can own Britain – and that includes the USA
17:00 , Bryony Gooch
Reeves ‘stands ready’ to support release of petroleum from reserves
16:44 , Tara CobhamPolitical reporter Athena Stavrou reports:
The chancellor is currently updating MPs in the Commons amid concerns the ongoing war in Iran could spark a global fuel crisis.
Rachel Reeves said she “stands ready” to support the release of oil from reserves in an attempt to reduce the economic shock of the oil price hike.
It comes after she met her G7 counterparts this afternoon to discuss the crisis.
She also said she will be meeting the chair of insurance firm Lloyds of London, amid issues with ships being able to secure safe passage through the strait of Hormuz.
Reeves vows to families April price cap 'will not change'
16:43 , Tara CobhamRachel Reeves has vowed to families that the April price cap “will not change”.
Speaking in the Commons, the chancellor said: “I want to be clear to families at home that despite the movements we have seen in energy prices in the last few days, the price cap for domestic bills for April will not change, giving families, immediate certainty on their bills until at least the end of June.”
Reeves tells Commons Middle East conflict likely to push inflation up in coming months
16:37 , Tara CobhamRachel Reeves has told the Commons the Middle East conflict is likely to push inflation up in the coming months.
The chancellor said: “The economic impact of the situation in the Middle East will depend, of course, on its severity and its duration.
“The movements that we have already seen are likely to put upward pressure on inflation in the coming months. But I also want to confirm to the house that our financial markets are functioning, and I'm in regular touch with the government of the Bank of England.”
What could the oil price surge mean for inflation and interest rates?
16:30 , Bryony GoochSome experts have warned that if oil and gas prices remain elevated, this could push up inflation in the UK.
The British Chambers of Commerce (BCC) said that higher oil and gas prices linked to the war could push up Consumer Prices Index (CPI) inflation in the UK to 2.7 per cent by the end of 2026, compared with a previous 2.1 per cent forecast.
This could discourage the Bank of England from cutting UK interest rates in the near-term, while it monitors the situation in the Middle East.
The National Institute of Economic and Social Research (Niesr) predicted that a prolonged energy price shock means rates could rise above 4%, from the current 3.75%, by the end of the year.
How have UK petrol prices been affected by US-Iran war and rising cost of oil?
16:00 , Bryony Gooch
How have UK petrol prices been affected by US-Iran war and rising cost of oil?
G7 not made decision on release of emergency oil stocks
14:28 , Bryony GoochG7 countries have not made a decision yet on the potential release of emergency oil stocks in the wake of the war in Iran, France's Finance Minister Roland Lescure said on Monday.
"We are not there yet," Lescure told reporters after a G7 meeting of finance
The International Energy Agency called for a coordinated release of emergency oil reserves during online meeting with the finance ministers from the Group of Seven nations on Monday, Japanese finance minister Satsuki Katayama told a briefing.
"IEA called for each country to do coordinated release of oil reserves," Katayama said, as the ministers gathered online to discuss the impact of war in Iran on the markets which saw oil prices surging to more than $119 a barrel on Monday.
Third Government rescue flight lands in the UK
14:20 , Bryony GoochA third Government rescue flight from the Middle East has landed in the UK.
The jet touched down in the early hours of Monday morning after leaving Oman on Sunday night, the Prime Minister’s official spokesman said.
The first Government charter flight landed at Stansted on Friday, and the second at Gatwick on Saturday.
Oman has emerged as a key location for people wanting to leave the Middle East, with British Airways also arranging special flights to London from the capital Oman.
The Prime Minister’s official spokesman said 40 commercial flights were scheduled to depart the region for the UK on Monday.
More than 37,000 British nationals have returned to the UK from the Middle East since the response to the crisis began, he said.
Some 172,000 British nationals have registered their presence in the region.
The spokesman added: “We’re now looking at chartering a flight out of Dubai, and British nationals in Dubai wishing to access UK-government provided flights can do so via a booking portal.
“The Foreign Secretary will continue to speak to airlines, travel companies and regional governments to find safe routes home.”
Oil surges after Iran strikes – what next for petrol prices and money?
14:15 , Bryony Gooch
Oil, gas and stocks fluctuate over Iran – what it means for your money and pension
