A senior UK minister warned energy, food and flight costs could remain elevated for at least eight months after the Iran war is resolved.
People in the UK could face higher energy, food and flight prices for at least eight months after the US-Israel war with Iran is resolved, a senior minister has warned, as the government steps up contingency planning for possible supply-chain disruption.
Darren Jones, chief secretary to the prime minister, told the BBC’s Sunday with Laura Kuenssberg programme that ministers were examining the economic fallout “in a lot of detail.” He said the more likely effect for households was “price pressure” rather than empty supermarket shelves.
“Our best guess is eight plus months from the point of resolution that you'll see economic impacts coming through the system,” Jones said, adding that higher costs could show up in energy bills, food prices and airline tickets.
The warning comes after energy production and transport across parts of the Middle East slowed or stopped during the conflict, feeding global supply problems. UK officials had earlier drawn up a worst-case scenario that included possible shortages of some foods by the summer if the war continued.
The government has sought to discourage panic buying or sudden changes in travel plans. It has urged drivers to keep using petrol stations as normal and told the public not to alter trips because of concerns about potential jet fuel shortages. UK air carriers have said they are not currently seeing a jet fuel shortage, with fuel bought in advance and airports holding stocks.
Prime Minister Sir Keir Starmer is expected to chair another meeting on Tuesday of a Cabinet committee created to manage possible shortfalls. A ministerial contingency group led by Jones is also meeting twice a week to monitor stock levels and disruptions to the supply chain.
One concern is the supply of carbon dioxide, which is used in animal slaughter and food preservation. A government source previously told the BBC that ministers were planning for possible CO2 supply breakdowns linked to the closure of the Strait of Hormuz, a key shipping route. The government has funded the reactivation of the Ensus bioethanol plant, which produces CO2 as a by-product, to strengthen domestic supplies.
Jones said he had raised the possibility of pubs running short of draught beer during the men’s football World Cup because of CO2 pressures, but added: “We are doing everything we can to make sure that is not the case.”
The economic outlook has also weakened. The International Monetary Fund last week predicted the war-related energy shock would hit the UK hardest among advanced economies and cut its UK growth forecast for this year to 0.8%, down from 1.3%.
The Liberal Democrats have called for food security to be prioritised in the next King’s Speech and proposed a 10p fuel duty cut along with lower public transport costs. For now, ministers are presenting the risk as manageable but prolonged, with the main uncertainty tied to how quickly the conflict’s effects on energy, shipping and food supply chains ease.
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