Middle East war ‘could wipe out 75% of chancellor’s budget headroom’; UK inflation climbs to 3.3% – business live
UK inflation hits 3.3% as oil nears $100 a barrel; union warns Middle East war could wipe out 75% of chancellor’s budget headroom.
UK inflation hits 3.3% as oil nears $100 a barrel; union warns Middle East war could wipe out 75% of chancellor’s budget headroom. | Contesto: cronaca
Punti chiave
- Middle East war ‘could wipe out 75% of chancellor’s budget headroom’; UK inflation climbs to 3.3% – business live
Contesto
Britain’s inflation rate climbed to 3.3% in the latest reading, adding fresh pressure on household budgets as oil prices remain near $100 a barrel despite a ceasefire extension in the Middle East. The rise, driven largely by surging petrol costs linked to the ongoing conflict in Iran and the closure of the Strait of Hormuz, has prompted stark warnings from union leaders that the worst may be yet to come for workers and the public finances. Sharon Graham, general secretary of the Unite union, said the uptick in inflation appeared to be “just the beginning” and that the economic outlook was “increasingly bleak.” She pointed to the war in Iran, which she described as “Trump’s illegal war,” as the primary driver of higher energy bills and broader price pressures. “Before the war in Iran, workers were already forecast to get poorer,” Graham said. “The outlook is now looking increasingly bleak. Workers must not pay the price yet again for a crisis not of their making.” The conflict has kept the Strait of Hormuz, a critical chokepoint for global oil shipments, effectively closed, sustaining crude prices near $100 a barrel even as a temporary ceasefire extension offered some relief. Analysts warn that prolonged disruption could push prices higher, further stoking inflation and eroding the chancellor’s fiscal headroom. According to recent Treasury estimates, a sustained period of elevated oil prices could wipe out up to 75% of the budget cushion the government had set aside for economic shocks. Graham called on the government to take “decisive action” on soaring energy bills, arguing that households were already feeling the pain. She also urged the Bank of England to remain focused on cutting interest rates as soon as possible, warning that higher borrowing costs combined with “Trumpflation” would increase pressure on families and businesses. “Lowering rates would provide vital support for economic growth, which is an important part of the Bank’s remit too,” she added. The inflation figure, which came in above expectations, complicates the Bank of England’s task. While rate-setters have been signalling a potential pivot toward easing later this year, the combination of...
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