Reeves vows to shield UK from Israel-Iran price shock

Reeves vows to shield UK from Israel-Iran price shock 1 hour ago Share Save Lucy Hooker BBC Business reporter Share Save Getty Images Chancellor Rachel Reeves says the government will do "everything in [its] power" to protect people in the UK from the knock-on economic effects of the conflict between Iran and Israel. She would not "take anything off the table" in response to the threat of rising energy costs, she told the BBC's Sunday with Laura Kuenssberg programme. The global oil price rose sharply on Friday following the initial attacks by Israel and Iran's subsequent response. A rise in the cost of oil pushes up petrol and diesel prices and can fuel inflation more broadly. Following Russia's full scale invasion of Ukraine in 2022, oil prices spiked to nearly $130 a barrel, contributing to higher prices for UK shoppers on everything from transport to food. However the cost of a barrel of oil, currently around $75, is still lower than it was in January. "There is no complacency from myself or the Treasury," Reeves told the BBC. In 2022, following the start of the Ukraine war, the Conservative government responded to higher energy prices by stepping in to help households with their bills. "We are not anywhere near that stage at the moment," the chancellor said. Household energy bills respond slowly to rising wholesale energy prices, and average bills, as set by the price cap, are due to come down in July. If the conflict continues, and in particular if there is disruption to shipping in the Strait of Hormuz, the waterway off the south coast of Iran, the price of oil and gas could rise further. However, oil market experts say there is currently less upward pressure on the price of oil than there was three years ago. How the Israel-Iran conflict could affect energy prices