{"id":12925,"date":"2026-03-10T16:17:08","date_gmt":"2026-03-10T16:17:08","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/12925\/"},"modified":"2026-03-10T16:17:08","modified_gmt":"2026-03-10T16:17:08","slug":"energy-spike-from-iran-war-could-add-1-to-uk-inflation-this-year-obr-says","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/12925\/","title":{"rendered":"Energy spike from Iran war could add 1% to UK inflation this year, OBR says"},"content":{"rendered":"\n

A sustained spike in energy prices driven by the US-Israel war with Iran could mean UK inflation ends the year one percentage point higher than expected, the Government\u2019s official forecaster has said.<\/p>\n

Professor David Miles, a member of the Office for Budget Responsibility (OBR\u2019s) budget responsibility committee, said the impact of the conflict on UK prices could be \u201csignificant\u201d and \u201ccompletely unwelcome\u201d.<\/p>\n

Quizzed by MPs on the Treasury Committee following the OBR publishing new forecasts alongside the Chancellor\u2019s spring statement last week, Prof Miles said oil prices were currently about 20% higher than they were before fighting escalated, and gas prices were up by about 50%.<\/p>\n

\u201cIf there\u2019s no change in the picture on prices from now on forward, we estimate something like a 1% higher level of consumer prices in the UK by the end of the year,\u201d he said.<\/p>\n

\u201cWe had thought, without taking all this into account, that the inflation rate in the UK might be pretty close to 2%.<\/p>\n

\u201cRight now, if prices don\u2019t change from where they are \u2013 both the spot prices and market expectations for futures prices, which is particularly important for the Ofgem price cap \u2013 we think the inflation rate would end the year not near 2%, but nearer 3%.<\/p>\n

\u201cMaterial, significant, as yet not on the same scale as we experienced after the Russian invasion of Ukraine.<\/p>\n

\u201cEnough to be noticeable and completely unwelcome, because there\u2019s no upside to all this \u2013 we are significant importers of both oil and gas. There\u2019s nothing but negative effects from those price rises being higher.<\/p>\n

\u201cI\u2019d have given you a different answer probably yesterday morning, and by the end of the week it could look different again. It\u2019s not clear which way we go from here.\u201d<\/p>\n

Prof Miles said the impact of a sustained energy price spike would come through \u201cpretty quickly\u201d for petrol, which has \u201cprobably moved already\u201d, but would take longer to feed through into household energy bills.<\/p>\n

It would not be until Ofgem sets its next price cap from the beginning of July that households feel the effects, he said.<\/p>\n

\"Prime Chancellor Rachel Reeves met the finance ministers of other G7 nations on Monday over the recent energy price shock (Stefan Rousseau\/PA) \u00b7 Stefan Rousseau <\/p>\n

Last week, analysts at Cornwall Insight forecast that household energy bills could rise by 10% from July after sharp increases in wholesale gas prices.<\/p>\n

This means Ofgem\u2019s price cap for July to September would surge to \u00a31,801 a year for a typical dual fuel household \u2013 an increase of \u00a3160 or 10% on April\u2019s cap.<\/p>\n

Rachel Reeves warned on Monday that America and Israel\u2019s war with Iran is \u201clikely to put upward pressure on inflation\u201d over the coming months.<\/p>\n

She said she was ready to support \u201ca co-ordinated release\u201d of international oil reserves to ease the economic shock of the crisis and called for action to \u201cguarantee the security of vessels passing through the Strait of Hormuz\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"A sustained spike in energy prices driven by the US-Israel war with Iran could mean UK inflation ends…\n","protected":false},"author":2,"featured_media":12926,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[7091,375,376,34,7095,7093,7094,7092],"class_list":{"0":"post-12925","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-iran","8":"tag-david-miles","9":"tag-energy-prices","10":"tag-gas-prices","11":"tag-iran","12":"tag-office-for-budget-responsibility","13":"tag-prof-miles","14":"tag-sustained-energy","15":"tag-wholesale-gas-prices"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116205783999885671","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/12925","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=12925"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/12925\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/12926"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=12925"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=12925"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=12925"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}