Chancellor Rachel Reeves said the intense fighting been Iran and Israel had driven up oil and gas prices by 10% – and expressed concern about the impact on trade
Rachel Reeves has warned that the Israel-Iran conflict could push up prices as costs of oil and gas surged.
The Chancellor said the intense fighting had driven up oil and gas prices by 10% – and expressed concern about the impact on trade. Concerns are rising over the Straits of Hormuz – the waterway between Iran and the Arabian peninsula which is vital for global energy supplies.
She told Sky News: “There are two immediate concerns. The first is around oil and gas prices. Over the course of this week, oil and gas prices have gone up by just over 10%. They are still down compared to a few months ago but of course we are keeping an eye on that.
“At the same time, trade routes are very important through the Middle East. We’ve seen disruption there in the past, partly because of the Houthi attacks for example, and so that is of course a concern.”
In an interview with the BBC, Ms Reeves said she won’t take “anything off the table” on supporting Brits if energy bills rocket. But she said “we’re not anywhere near that stage” when asked if the Government could step in to help people pay bills like Liz Truss in 2022.
Ms Reeves said it was “early days” and the UK is pressing both sides to step back from the brink. But she insisted the UK was not at war after Keir Starmer last night confirmed that more RAF jets were being sent to the region after Iran threatened to target UK, French and US bases if the countries help stop strikes on Israel.
She said: “No, it does not mean that we are at war. And we have not been involved in these strikes or this conflict, but we do have important assets in the region and it is right that we send jets to protect them and that’s what we’ve done. It’s a precautionary move.”
Pressed on whether the UK could support Israel against Iran, she said she was “not going to rule anything out at this stage” given the “fast-moving situation”.
Asked whether the UK would come to Israel’s aid if asked, the Chancellor said: “We have, in the past, supported Israel when there have been missiles coming in.
“I’m not going to comment on what might happen in the future, but so far, we haven’t been involved, and we’re sending in assets to both protect ourselves and also potentially to support our allies.”
Pushed again, she said: “What we’ve done in the past (…) is help protect Israel from incoming strikes. So a defensive activity.”
She added: “I’m not going to rule anything out at this stage (…) it’s a fast moving situation, a very volatile situation. But we don’t want to see escalation, we want to see de-escalation.”
The Prime Minister has flown out to Canada for the G7 summit, where the crisis in the Middle East is likely to dominate discussions.
Speaking to reporters on his way to Ottawa, he said: “We are moving assets to the region, including jets, and that is for contingency support in the region. I will be clear-eyed in relation to our duties and obligations and my duties as Prime Minister of the United Kingdom.”
It is understood aircraft began deployment preparations on Friday. The UK already has jets in the region as part of its Operation Shader contribution.
The PM also urged the Iranian regime and Benjamin Netanyahu’s Israeli government to de-escalate and pull back from the brink.