Prime Minister Sir Keir Starmer will chair a COBRA meeting with key cabinet ministers and the Bank of England governor to address the economic impact of the ongoing war involving Iran, Sky News understands. The meeting aims to discuss rising cost-of-living pressures and measures to support households amid escalating energy prices.
Government Response to Energy and Inflation Concerns
The COBRA meeting comes as Sir Keir recently spoke with the US president about reopening the Strait of Hormuz, a vital global shipping route disrupted by the conflict. A Downing Street spokesperson confirmed that both leaders agreed on the importance of reopening the strait to stabilize global energy markets and agreed to maintain further communication.
Energy costs are rising sharply due to the war, with forecaster Cornwall Insight predicting that Ofgem’s July energy price cap could increase from £1,807 to £1,973 annually for the average household, up significantly from April’s £1,641 cap. Around 20% of the world’s oil and liquefied natural gas flows through the Strait of Hormuz, which has been effectively closed due to the threat of Iranian strikes.
Government Assurances and Preparations for Fuel Supply
Housing Secretary Steve Reed told Sky News there is currently no need to ration fuel in the UK despite the conflict. He acknowledged contingency plans exist but said the government is not activating them at this time. Reed cited recent government interventions to support heating oil users facing steep price increases, including a £53 million support package for low-income consumers not covered by the price cap.
Economists warn the war could push inflation toward 5% this year, up from previously forecasted declines to around 2%, with interest rates also potentially rising. The government faces the challenge of balancing candid communication with efforts to avoid public panic over fuel supplies.
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