Economy could suffer for eight months after Iran war ends, minister says
Surging food and energy prices caused by the Iran war could last for more than eight months after the conflict ends, Starmer’s right-hand man has said.
Higher petrol, food and plane ticket prices will persist for “eight-plus months” following the end of the conflict, chief secretary to the Prime Minister Darren Jones said.
The minister said on Sunday: “You’re going to see prices go up a bit as a consequence of what Donald Trump has done in the Middle East.
“And quite frankly, that’s probably going to come online, not just in the next few weeks, but the next few months. There’s going to be a long tail from this.”
The Strait of Hormuz, a crucial shipping passage between Iran and Oman, has been all but entirely blocked since the US and Israel launched attacks on Iran at the end of February.
The blockage has sent global energy prices soaring, with higher fuel prices being felt by drivers in the UK and food price inflation just around the corner – according to a top trade body.
Minister: Price rises Trump’s fault
Appearing on the BBC’s Sunday with Laura Kuenssberg programme, Jones was asked how long Brits will face higher prices once the strait is unblocked.
“I think our best guess is eight-plus months from the point of resolution that you’ll see economic impacts coming through the system,” he said.
Jones added: “People will see higher energy prices, food prices and those types of issues, flight ticket prices, as a consequence of what Donald Trump has done in the Middle East.”
The Food and Drink Federation (FDF), which represents the UK’s 12,000 food and drink manufacturers, expects food inflation to soar to between nine and 10 per cent this year.
But supermarkets have so far refused to say when price rises will come into effect and how significant this inflation will be.
Food inflation rose to 3.3 to 3.7 per cent in March, and experts told the Bank of England on Friday that they expect the rate of food inflation to reach six or seven per cent this year.
The UK’s biggest supermarket, Tesco, has said it will do “everything in [its] power to minimise” the impact of the conflict on customers, but its boss said he does not recognise the FDF’s inflation forecast.
Supermarkets ramp up pressure on Labour
Supermarkets have begun to pile pressure on the government to cut their energy bills so they can focus on keeping prices low for shoppers.
The bosses of Tesco, Sainsbury’s, Marks & Spencer and Asda have called on the Treasury to cut so-called policy costs from their energy bills.
Darren Jones said his government is assessing how it can minimise the effects of price rises, as the minister was announced on Sunday as the chair of a new Contingency Planning Group.
He told the BBC: “The Government here in the UK, the work that I’m doing with the Prime Minister is looking at all of those things and saying, ‘What can we do within our power to help people to get through those difficult times?’”
An open-ended ceasefire between Iran and the US and Israel has paused most fighting in the Middle East, but the route to a permanent end to the war remains unclear.
Donald Trump cancelled his special envoys’ trips to Pakistan for a new round of talks, after Tehran’s delegation left the country.
The US President said: “Too much time wasted on travelling, too much work! Besides which, there is tremendous infighting and confusion within their “leadership”.”