Ministers under pressure to bring in cost-of-living support package amid inflation fears
Good morning and welcome to our live coverage of UK politics. The chancellor, Rachel Reeves, and the prime minister, Keir Starmer, indicated yesterday that the government could be prepared to intervene to protect UK households against major cost-of-living shocks to come at the next energy price cap, as Brent crude, the international benchmark, surged as high as $119.50 a barrel on Monday.
Brent then slid back to about $91 when Donald Trump described the US-Israeli war on Iran as “very complete, pretty much” in an interview with CBS News yesterday evening.
His contradictory statements on the timeline for the duration of the war have added to market turbulence, with fears of a prolonged conflict causing governments to consider support packages to protect people from higher prices caused by a predicted surge in inflation.
The British Chambers of Commerce forecast that inflation would remain “firmly above” the Bank of England’s 2% target, noting the “highly uncertain” global situation.
Following a call with her G7 counterparts on Monday, Reeves said she was ready to support “a coordinated release” of international oil reserves to ease the economic shock of the escalating crisis.
She also called for action to “guarantee the security of vessels” passing through the strait of Hormuz, one of the world’s most important shipping routes. The war has severely reduced sea traffic through the strait which carries about one-fifth of global seaborne crude oil.
Starmer said a prolonged conflict would affect the “lives and households of everybody” but vowed that ministers would seek to “get ahead” in case of that event.
Reeves is due in the Commons for Treasury questions at 11.30am as she faces calls to ditch a planned 5p rise in fuel duty in September and set out an emergency package to shield households from global energy price rises and inflationary pressures.
Key events
This policy paper on the changing fuel duty rates says the following:
Alongside other measures announced at Budget 2025 to address the cost of living, this measure continues to support motorists by freezing the current fuel duty rates until the end of August 2026.
Rates will gradually return to March 2022 levels by March 2027, avoiding a 5 ppl increase in March 2026 when the cut was due to expire.
The planned increase in line with inflation for 2026 to 2027 is also being cancelled. This measure will save the average car driver £49 in 2026 to 2027 compared to previous plans.
Reform UK leader, Nigel Farage, and his Treasury spokesperson Robert Jenrick are expected to hold a press conference at a petrol station in Derbyshire shortly and will no doubt be accusing ministers of not doing enough to help motorists.
Writing in The Sun, Farage and Jenrick said:
If Reform were in government, it would never have happened. We will spend the next few months trying to shame Rachel Reeves into cancelling it [the fuel duty rise].
But if she doesn’t – whether because she’s running scared of the Greens or in hock to her far-left backbenchers – then Reform will reverse it in our first budget. Because what she’s doing just isn’t fair.
You can follow the latest market developments in our business live blog, which is leading on how oil prices are falling and stocks rebounding after Donald Trump said the war would end soon:
The RAC, which represents UK motorists, has said average petrol and diesel prices will likely keep on rising – one of the many examples of how the turmoil in the global energy markets is hitting households already.
The i is reporting that Rachel Reeves could U-turn on the plan to hike fuel duty in September, pointing to a non-committal quote from the prime minister’s spokesperson yesterday. The spokesperson said: “We’re obviously closely monitoring prices in light of the situation in the Middle East. I know there’s been reporting around fuel duty. The chancellor keeps all taxes under review and takes decisions at the budget.”
Rachel Reeves faces growing calls to cancel planned increase in fuel duty
As we mentioned in the opening post, Rachel Reeves is under pressure to cancel the planned increase in fuel duty due in September which will cause drivers to pay more for petrol and diesel as the government rolls back a temporary cut that was introduced in 2022 in response to Russia’s full-scale invasion of Ukraine.
At her budget last year, Reeves said the 5p cut would be unwound between September 2026 and March 2027, but the Conservatives and Liberal Democrats have called for her to change course in light of the Israeli-US war with Iran. The Tories have promised to bring a vote on reversing the planned increase.
The Conservative party leader, Kemi Badenoch, said:
Rachel Reeves is planning to hike Fuel Duty for the first time in 15 years at the worst possible moment. Last week at the Spring Statement she knew full well that global instability was pushing oil prices up again.
Instead of helping families and businesses, she chose to pat herself on the back. Now motorists across the country face the double hit of rising petrol prices and higher fuel tax. This is Labour’s instinct: higher taxes and the wrong priorities. Labour must axe the Fuel Tax rise!
The Lib Dem leader, Ed Davey, went further, saying the prime minister should convene the government’s emergency Cobra committee “to personally get a grip on the threat of brutal price shocks facing families, pensioners and businesses”.
Ministers under pressure to bring in cost-of-living support package amid inflation fears
Good morning and welcome to our live coverage of UK politics. The chancellor, Rachel Reeves, and the prime minister, Keir Starmer, indicated yesterday that the government could be prepared to intervene to protect UK households against major cost-of-living shocks to come at the next energy price cap, as Brent crude, the international benchmark, surged as high as $119.50 a barrel on Monday.
Brent then slid back to about $91 when Donald Trump described the US-Israeli war on Iran as “very complete, pretty much” in an interview with CBS News yesterday evening.
His contradictory statements on the timeline for the duration of the war have added to market turbulence, with fears of a prolonged conflict causing governments to consider support packages to protect people from higher prices caused by a predicted surge in inflation.
The British Chambers of Commerce forecast that inflation would remain “firmly above” the Bank of England’s 2% target, noting the “highly uncertain” global situation.
Following a call with her G7 counterparts on Monday, Reeves said she was ready to support “a coordinated release” of international oil reserves to ease the economic shock of the escalating crisis.
She also called for action to “guarantee the security of vessels” passing through the strait of Hormuz, one of the world’s most important shipping routes. The war has severely reduced sea traffic through the strait which carries about one-fifth of global seaborne crude oil.
Starmer said a prolonged conflict would affect the “lives and households of everybody” but vowed that ministers would seek to “get ahead” in case of that event.
Reeves is due in the Commons for Treasury questions at 11.30am as she faces calls to ditch a planned 5p rise in fuel duty in September and set out an emergency package to shield households from global energy price rises and inflationary pressures.
