Food and fuel prices could remain elevated for more than eight months after the Iran war ends. Chief Secretary to the Prime Minister Darren Jones said the UK was likely to face prolonged price pressure as disruption to oil, gas and ammonia supplies feeds through into energy, food production and transport costs.
Speaking to the BBC, Jones said the government’s “best guess” was that the economic impact would last for “eight-plus months” from the point the conflict is resolved.
He said shoppers were more likely to see higher prices than empty shelves, with the disruption expected to affect energy-intensive supply chains rather than immediately trigger widespread food shortages.
“People will see higher energy prices, food prices and those types of issues, flight ticket prices, as a consequence of what Donald Trump has done in the Middle East,” Jones said.
The warning comes as ministers step up efforts to monitor potential disruption to UK food and fuel supplies. Jones is leading a contingency planning group of ministers, which is meeting twice a week to assess stock levels and supply chain resilience.
The group is understood to be focused on the impact of the Strait of Hormuz blockade, which has reduced the flow of oil, gas and ammonia from the Gulf.
Ammonia is used in fertiliser, while it is also key to the production of carbon dioxide, which is used across food preservation, animal slaughter, sparkling drinks, medical services and defence.
Ministers have stressed that there are currently no shortages and have urged drivers to continue filling up as normal. The government has also said people should not change travel plans over concerns about potential jet fuel disruption.
However, the retail and food sectors are likely to remain on alert over the knock-on effects of rising input costs, particularly if energy, fertiliser and CO2 supply issues continue into the summer.
Earlier this month, reports suggested the government had been preparing for a worst-case scenario in which the UK could face food shortages, including chicken and pork, if the war continues and CO2 supplies are hit.
Prime Minister Sir Keir Starmer is set to chair a meeting of the new Middle East Response Committee on Tuesday, with Jones due to report into the group.
Jones said the government was acting to “prepare for, and mitigate where possible” the impact on the UK economy and domestic security.
“This is not our war. The government made the right call to stay out of the conflict and only take defensive action to protect Britain’s interests,” he said.
“The prime minister wants to see a toll-free Strait of Hormuz reopened as soon as possible. The UK is working tirelessly with our international partners to find a permanent solution to this crisis and minimise the knock-on impact to households.”
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