PM Highlights Economic Risks from Prolonged Iran Conflict
The longer the conflict involving Iran continues, the greater the likelihood of economic repercussions, Sir Keir Starmer has cautioned.
Addressing an audience at a community centre in London, the prime minister acknowledged public concerns and stated that his administration was "assessing the risks, monitoring and talking to our international partners" to mitigate the "impact on people here."
He emphasized that the UK economy is currently in a stronger position to absorb shocks to energy supply compared to 2022, when Russia's invasion of Ukraine caused energy prices to surge dramatically.
Global Oil Prices Surge Amid US-Israeli-Iran Tensions
Recent days have seen a sharp increase in global oil prices due to fears that the ongoing US-Israeli conflict with Iran could result in prolonged disruptions to energy supplies.
This escalation has led the G7 group, comprising the world's wealthiest nations, to convene an emergency meeting focused on the economic consequences of the conflict.
Donald Trump's Comments on Oil Prices and Military Strategy
In a social media statement, former US President Donald Trump remarked:
"Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A and World, Safety and Peace."
Trump has also criticized the prime minister for not permitting the US to utilize British military bases for initial offensive operations against Iran.
Responding on Monday, Sir Keir stated that the UK and US were "working together as they always have" but clarified that "decisions about what is in Britain's best interest are decisions for the prime minister of Britain."
UK Gas Prices and Energy Support Measures
On Monday, UK benchmark gas prices rose sharply to 158p per therm, up from 80p two weeks prior, though still significantly lower than the over 600p peak experienced during the Ukraine war four years ago.
These earlier increases had prompted the previous Conservative government to introduce energy bill support schemes costing approximately £44 billion.
The current government has yet to announce a similar package. During his visit to the community centre, the prime minister highlighted that the existing energy price cap would shield households from immediate cost increases.
Prior to the onset of the Iranian conflict last month, Ofgem announced that the energy price cap would decrease by around 7% starting in April, reducing energy bills for residents in England, Wales, and Scotland.
This cap ensures that consumers on variable tariffs will not face price increases until at least July, when a new cap level will be established.
Nevertheless, the ongoing conflict could trigger immediate rises in petrol pump prices and potentially induce inflationary pressures affecting food and industrial chemicals.
Prime Minister Addresses Public Anxiety and Government Response
Sir Keir acknowledged the public's concerns amid the conflict's ninth day, stating:
"I do understand the anxiety now, at nine days into this conflict, where a number of people will be saying 'well, now is the situation going to get worse, and how's it going to impact me and my family?'"
He continued:
"At the moment, what we're doing is monitoring the risk, working with others to mitigate the risk.
It is important to acknowledge that that work is needed, because people will sense... that the longer this goes on, the more likely the potential for an impact on our economy, impact into the lives and households of everybody and every business.
And our job is to get ahead of that, to look around the corner, assess the risk, monitor the risks, and work with others in relation to that."
Conservative Leader Calls for Faster Government Action
Conservative leader Kemi Badenoch expressed concern that the prime minister might be "slow" to respond to the cost of living challenges.
She urged the government to commit to reducing fuel duty, which is anticipated to increase in September.
Badenoch also highlighted her party's "cheap power plan," which includes eliminating net-zero targets and expanding gas drilling in the North Sea.
