Middle East tensions and U.S.-Israel strikes on Iran pushed global oil prices above $100 a barrel, raising inflation and cost of living concerns in the UK.

Escalating Middle East tensions, including U.S. and Israeli strikes on Iran, have driven global oil prices above $100 a barrel—the highest since 2022—sparking concerns over rising inflation and energy costs in the UK. Chancellor Rachel Reeves warned of inflationary pressure, emphasized readiness to support a coordinated international oil reserve release, and highlighted ongoing efforts to stabilize fuel prices through duty cuts and monitoring for price gouging. Despite a stable energy price cap and infrastructure investments, rising gas and petrol costs, coupled with supply chain disruptions in the Strait of Hormuz, have triggered warnings of a potential cost of living crisis, with experts cautioning that sustained high energy prices could strain household budgets and economic growth.