Sun, 15 Jun 2025

Sun, 15 Jun 2025 Reeves vows to shield UK from Israel-Iran price shock

The chancellor said nothing was "off the table" in protecting people from the impact of higher oil prices.
UK Chancellor Rachel Reeves has assured that the government will take all necessary measures to mitigate the economic effects on the UK population resulting from the Iran-Israel conflict. She stated that they won't rule out any options in dealing with rising energy costs, which have increased following the conflict's escalation. The global oil price rose sharply after the initial attacks by Israel and subsequent responses from Iran. This increase can lead to higher petrol and diesel prices as well as fuel inflation. Reeves emphasized that there is no complacency within her office or the Treasury regarding this situation. The UK government intervened in 2022 to help households with their energy bills during a similar crisis triggered by Russia's invasion of Ukraine, but Reeves noted that they are not at that stage yet. As average household energy bills are due to decrease in July due to a price cap, the conflict could still lead to higher oil and gas prices if there is disruption to shipping in key areas. However, experts believe there is less upward pressure on oil prices currently compared to three years ago. To address potential issues with domestic energy production, Reeves highlighted recent government investments in sectors like nuclear energy, offshore wind, and carbon capture. While some of these projects will take several years to complete, others may have a more immediate impact, such as home insulation initiatives. Former BP CEO Lord John Browne echoed the need for prioritizing energy security and transitioning away from fossil fuels. He expressed concerns that the government's plans might be overly ambitious and could take longer than anticipated. Shadow Chancellor Sir Mel Stride emphasized the importance of understanding the implications of this conflict on various economic indicators, including oil prices, equity markets, inflation rates, interest rates, and global trade.
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