British Prime Minister Sir Keir Starmer has convened an emergency COBRA economic meeting to address mounting risks from the ongoing war in Iran and its growing impact on the UK’s financial outlook. With prices of oil and gas surging as the conflict disrupts global markets and energy supplies, officials fear inflation could climb sharply, borrowing costs could rise, and households and businesses could face deeper economic pain.
Starmer plans to bring together senior ministers, the Bank of England governor, and key advisors to assess the fallout on inflation, growth, and public finances, as well as options for support if costs continue to spike.
Market volatility has already pushed UK government bond yields to levels not seen since the global financial crisis, reflecting investor anxiety about higher energy costs and inflationary pressures. Economists warn that without swift action, the conflict’s effects could bleed into broader economic weakness.
At the same time, the government has to balance the need to protect the economy with rising living costs for ordinary Britons, especially as energy bills hit households. Starmer’s meeting underscores how far a distant conflict in the Middle East is now reaching into the heart of the British economy, potentially reshaping fiscal and monetary policy responses in the weeks ahead.
