{"id":544529,"date":"2026-04-22T11:35:32","date_gmt":"2026-04-22T11:35:32","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/544529\/"},"modified":"2026-04-22T11:35:32","modified_gmt":"2026-04-22T11:35:32","slug":"middle-east-war-could-wipe-out-75-of-chancellors-budget-headroom-uk-inflation-climbs-to-3-3-business-live-business","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/544529\/","title":{"rendered":"Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live | Business"},"content":{"rendered":"<p>Key events<\/p>\n<p>Show key events only<\/p>\n<p>Please turn on JavaScript to use this feature<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/04\/1776857730_990_Lisa-OCarroll-byline-004.jpg\" alt=\"Lisa O\u2019Carroll\" class=\"dcr-lysqes\"\/>Lisa O\u2019Carroll<\/p>\n<p class=\"dcr-130mj7b\">The European Commission cannot say if it will be able to stave off an aviation crisis that could hit holiday and business flights in six weeks time.<\/p>\n<p class=\"dcr-130mj7b\">The energy commissioner Dan Jorgensen said they had developed new tools in Brussels to ensure an \u201coverview of refining capacity and stock in our different member states.<\/p>\n<p class=\"dcr-130mj7b\">But he added:<\/p>\n<p>double quotation markBut obviously we have to be quite honest and say that wehter or not we will be a security-of-supply crisis is primarily a result of what goes on in the Middle East.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e8aae18f082dfca2effd1b#block-69e8aae18f082dfca2effd1b\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a>EU energy commissioner: Oil price crisis could last months or years even if there is peace<img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/04\/1776857730_990_Lisa-OCarroll-byline-004.jpg\" alt=\"Lisa O\u2019Carroll\" class=\"dcr-lysqes\"\/>Lisa O\u2019Carroll<\/p>\n<p class=\"dcr-130mj7b\">The EU\u2019s energy commissioner has warned that the oil price crisis could last months or years even if there is peace.<\/p>\n<p class=\"dcr-130mj7b\">And he has confirmed that the aviation sector faces the prospect of a shortage in jet fuel in the next five or six weeks. <\/p>\n<p>The EU imports 30% to 40% of its jet fuel needs, with about half coming from the Middle East. Dan Jorgensen said at a briefing unveiling emergency measures to deal with the crisis caused by the Iran war<\/p>\n<p>double quotation markJet fuel: this is the area now that is under most pressure and the IEA [International energy agency] has estimated that within five or six weeks we can have a real security of supply issue.<\/p>\n<p class=\"dcr-130mj7b\">He warned that even if a peace deal is struck in the next few weeks between Iran and the US, the crisis will last months and perhaps years.<\/p>\n<p>double quotation markWe are looking into some very difficult months, or maybe even years depending on the development in the Middle East,\u201d he said.<\/p>\n<p>Take Qatar. It may take two years to rebuild its gas and transportation structure.<\/p>\n<p>It means that the world market for LNG prices will not stabilise of even fall as was expected in the next couple of years.<\/p>\n<p>Even a best case scenario is a pretty bad scenario for the months to come.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e8aa4c8f0847c24ffc9682#block-69e8aa4c8f0847c24ffc9682\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a>Reeves tells bank CEOs they have &#8216;central role to play&#8217; in supporting households<img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/04\/1776857731_80_Kalyeena_Makortoff,_L.png\" alt=\"Kalyeena Makortoff\" class=\"dcr-lysqes\"\/>Kalyeena Makortoff<\/p>\n<p class=\"dcr-130mj7b\">Chancellor Rachel Reeves has told CEOs from banks including NatWest, Lloyds and HSBC that they have a \u201ccentral role to play\u201d in supporting consumers and households amid heightened uncertainty sparked by the US-Israeli war on Iran. <\/p>\n<p>In a meeting at 11 Downing Street at 8am this morning, Reeves and the City minister Lucy Rigby underlined that economic stability is the government\u2019s first priority, and set out how the chancello\u2019rs economic plan is \u201cstrengthening the UK\u2019s resilience and keeping costs down for households and businesses\u201d.<\/p>\n<p>She also told the bank bosses, which also included chief executives from Barclays and Nationwide Building Society, \u201cthat the financial services sector has a central role to play in managing risk, backing consumer confidence and supporting households,\u201d according to a Treasury briefing. <\/p>\n<p>It comes as borrowers brace themselves for mortgage rate increases, as soaring energy prices, triggered by the Iran conflict, have led to gloomy forecasts about rising inflation and mortgage costs.<\/p>\n<p>More than 1m UK households <a href=\"https:\/\/www.theguardian.com\/money\/2026\/apr\/01\/iran-war-higher-mortgage-payments-uk-households-bank-of-england\" data-link-name=\"in body link\" rel=\"nofollow noopener\" target=\"_blank\">could see the cost of servicing loans on their homes increase<\/a>, the Bank of England has predicted.<\/p>\n<p>Rachel Reeves, UK Chancellor of the Exchequer, is seen at the National Growth Debate at the Institute of Directors in London, on 21 April. Photograph: Anadolu\/Getty Images<a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e8a9c18f082dfca2effd10#block-69e8a9c18f082dfca2effd10\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/04\/1776857731_717_Helena_Horton,_R.png\" alt=\"Helena Horton\" class=\"dcr-lysqes\"\/>Helena Horton<\/p>\n<p class=\"dcr-130mj7b\">Scores of farmers are planning to leave their land fallow because of rising fertiliser and fuel costs making it uneconomical to grow crops in England this year, the Central Association of Agricultural Valuers (CAAV) has said.<\/p>\n<p class=\"dcr-130mj7b\">The group has asked the government to put in place a time-limited soil resilience scheme, to pay farmers to plant legumes in order to fix nitrogen in the soil and improve it for when it can be sown again.<\/p>\n<p class=\"dcr-130mj7b\">This follows several difficult years for arable farmers, with the sector having just had its worst year in cash terms since at least 2004\/5. Jeremy Moody, secretary and adviser to the CAAV in proposing an alternative to Defra, said:<\/p>\n<p>double quotation markThis may make it rational for some farmers not to plant crops this autumn for the 2027 harvest \u2013 leaving the land fallow instead.<\/p>\n<p class=\"dcr-130mj7b\">Moody pointed to indications from the southern hemisphere, where planting has begun. Early indications from Australia suggest that 27% of growers have reduced or stopped planting due to uncertainty over the conflict, 53% have less than three weeks of diesel to hand; with fuel 74% more expensive, and 19% have decided not to harvest existing crops due to increased costs of production and haulage, according to a survey by AUSVEG.<\/p>\n<p>The proposed soil improvement and resilience scheme would see the establishment of a mixed green legume manure, which could be used as a cover crop to improve soil structure and fertility, rather than leaving land fallow. Moody said:<\/p>\n<p>double quotation markThe green manure could be used under the current challenging geopolitical circumstances, signalling a culture of soil improvement for both resilience and productivity, as well as preparation for more extreme weather conditions,\u201d<\/p>\n<p>While farmers might decide to leave land fallow, a one-off scheme to establish a mixed green legume manure after harvest could provide a positive purpose for improvement and a single, simple signal of direction with lasting benefits.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e89c958f080c0af905106f#block-69e89c958f080c0af905106f\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><img decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/04\/1776857732_72_Heather_Stewart,_L.png\" alt=\"Heather Stewart\" class=\"dcr-lysqes\"\/>Heather Stewart<\/p>\n<p class=\"dcr-130mj7b\">At a Resolution Foundation event on the impact of the war this morning, experts have been discussing the dilemma facing Bank of England policymakers in the coming months, with inflation likely to continue rising, our economics editor Heather Stewart reports.<\/p>\n<p class=\"dcr-130mj7b\">Michael Saunders, a former member of the Bank\u2019s monetary policy committee (MPC), now at Oxford <a href=\"https:\/\/www.theguardian.com\/business\/economics\" data-link-name=\"in body link\" data-component=\"auto-linked-tag\" rel=\"nofollow noopener\" target=\"_blank\">Economics<\/a>, said he expects a couple of rate rises later this year \u2013 because the risks of letting inflation get out of control are greater than of over-reacting now.<\/p>\n<p>double quotation markThe cost of keeping rates too low and then having to catch up would be really high.<\/p>\n<p class=\"dcr-130mj7b\">He pointed out that equally valid economic models point to wage growth of 3.25% this year \u2013 or 4.5%.<\/p>\n<p>double quotation markIf they wait, and then find that pay growth is higher, and inflation expectations may be rising disproportionately, interest rates then would have to rise quite a long way.<\/p>\n<p>I think there\u2019s a reasonable chance you will get some tightening this year.<\/p>\n<p class=\"dcr-130mj7b\">Saunders said he would therefore,<\/p>\n<p>double quotation markpencil in a couple of hikes. Probably not next week. I think more likely one in June to September, one perhaps in the fourth quarter this year.<\/p>\n<p class=\"dcr-130mj7b\">However, Liz Martens, of HSBC, said weak growth in the economy might help to constrain so-called \u201csecond round effects,\u201d where wage growth rises, and firms pass on cost increases by raising prices.<\/p>\n<p>double quotation markIt\u2019s kind of three phases: number one, \u2018I want a pay rise\u2019. Well, yes, obviously. Number two, I have to get that pay rise. And number three, my employer then has to be able to pass that back on to their customers. And I think steps two and three are much trickier, in this economy.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e898b28f080c0af9051049#block-69e898b28f080c0af9051049\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p class=\"dcr-130mj7b\">Oil prices are rising again, as the situation in the Middle East remains very volatile.<\/p>\n<p class=\"dcr-130mj7b\">Donald Trump unilaterally extended the ceasefire between the US and Iran, but there have been reports of two attacks by Iran on cargo ships in the strait of Hormuz, and the US maintains its blockade of Iranian ports.<\/p>\n<p class=\"dcr-130mj7b\">Brent crude reversed an earlier dip to $96.54 a barrel, and is trading closer to $100 a barrel, at $99.32 a barrel, up 0.9%.<\/p>\n<p class=\"dcr-130mj7b\">The FTSE 100 index has turned positive, trading 6 points higher at 10,504. The German stock market is flat and the French, Italian and Spanish indices have dipped slightly, giving up earlier modest gains.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e8956a8f0823514721dc12#block-69e8956a8f0823514721dc12\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p>Updated at\u00a005.45 EDT<\/p>\n<p class=\"dcr-130mj7b\">The hospitality sector is counting the cost of the Iran war.<\/p>\n<p class=\"dcr-130mj7b\">Kate Nicholls, chair of UKHospitality, which represents bars, restaurants and hotels, said:<\/p>\n<p>double quotation markThe inflationary impact of the conflict in the Middle East is evident in today\u2019s figures.<\/p>\n<p>Hospitality businesses are highly exposed to increased fuel prices, through the price of food, drink, transport and other key inputs. As one of the final links in the food supply chain, the sector cannot be expected to pick up the bill for increased costs down the chain.<\/p>\n<p>Hospitality is already one of the most heavily taxed sectors in the economy and there is no room to absorb further cost increases. Ultimately, it will result in price rises at the till, further driving inflation.<\/p>\n<p>The impact on consumer demand should be closely monitored, as our pubs, restaurants, cafes and hotels will be the first to feel the combined hit of increased input costs and reduced spending.<\/p>\n<p>The government should be looking closely at how it can reduce the cost of doing business for demand-sensitive sectors like hospitality, which are uniquely exposed to these kinds of economic shocks.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e88e148f083643db211255#block-69e88e148f083643db211255\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p class=\"dcr-130mj7b\">The latest data is pointing to a \u201csteady market, with values stabilising and modest annual growth being recorded,\u201d according to Nick Leeming, chairman of the estage agent Jackson-Stops.<\/p>\n<p>double quotation markTransaction activity continues, but conditions are more constrained than in previous periods. Buyer demand is present, although increasingly contingent on pricing and financing, with affordability remaining a key consideration in determining the pace of sales.<\/p>\n<p>Performance continues to vary across regions, with markets characterised by stronger demand and constrained supply proving more resilient, while others are experiencing longer timeframes to agree sales and greater price sensitivity.<\/p>\n<p>Looking ahead, the near-term outlook will be influenced by the direction of mortgage rates and wider financing conditions. Recent adjustments in mortgage pricing, alongside ongoing uncertainty around the policy outlook from the Bank of England, are likely to weigh on momentum, even where underlying demand remains intact. At the same time, heightened geopolitical uncertainty is making the outlook more difficult to predict over the coming months. However, the market has so far shown continued resilience, with activity continuing even as borrowing costs have edged higher in recent weeks.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e889628f089d6794abfcc7#block-69e889628f089d6794abfcc7\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a>UK rent increases slow, house price inflation edges higher<\/p>\n<p class=\"dcr-130mj7b\">Rent increases in the UK have slowed, while house price inflation accelerated slightly, according to official figures.<\/p>\n<p class=\"dcr-130mj7b\">Average private rents increased by 3.4%, to \u00a31,377 a month, in the 12 months to March; this annual growth rate is down from 3.6% in February, <a href=\"https:\/\/www.ons.gov.uk\/economy\/inflationandpriceindices\/bulletins\/privaterentandhousepricesuk\/april2026\" data-link-name=\"in body link\" rel=\"nofollow noopener\" target=\"_blank\">the Office for National Statistics said<\/a>.<\/p>\n<p class=\"dcr-130mj7b\">Monthly rents increased to \u00a31,434 (3.4%) in England, \u00a3830 (4.8%) in Wales, and \u00a31,022 (2.1%) in Scotland, in March. In Northern Ireland, average rents increased to \u00a3880 (5.0%) in January.<\/p>\n<p class=\"dcr-130mj7b\">In England, private rents annual inflation was highest in the North East (6.5%), and lowest in London (1.7%) last month.<\/p>\n<p class=\"dcr-130mj7b\">The average value of a home in the UK increased by 1.2%, to \u00a3268,000, in the 12 months to February, up from 1% in January.<\/p>\n<p class=\"dcr-130mj7b\">House prices increased to \u00a3290,000 (0.8%) in England, \u00a3210,000 (2.5%) in Wales, and \u00a3187,000 (2.3%) in Scotland.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e8882d8f083643db211228#block-69e8882d8f083643db211228\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p>Updated at\u00a004.39 EDT<\/p>\n<p class=\"dcr-130mj7b\">Here\u2019s more reaction to the rise in UK inflation to 3.3%.<\/p>\n<p class=\"dcr-130mj7b\">Sharon Graham, general secretary of the Unite union, said:<\/p>\n<p>double quotation markToday\u2019s uptick in inflation looks like it is just the beginning. Before the war in Iran, workers were already forecast to get poorer. The outlook is now looking increasingly bleak.<\/p>\n<p>Workers must not pay the price yet again, for a crisis not of their making. As a minimum the government must take decisive action on soaring energy bills.<\/p>\n<p class=\"dcr-130mj7b\">TUC general secretary Paul Nowak said:<\/p>\n<p>double quotation markHouseholds are feeling the pain from Trump\u2019s illegal war. Big rises in petrol prices are pushing up inflation and shockwaves from the war are putting recent improvements in growth under threat.<\/p>\n<p>But the Bank of England must remain focused on cutting rates as soon as possible. Coupled with Trumpflation, higher interest rates would increase the pressure on already stretched families and businesses. But lowering rates would provide vital support for economic growth, which is an important part of the Bank\u2019s remit too.<\/p>\n<p>And ministers must go further to shield households and businesses. The last budget saw welcome action on energy prices, rail fares and prescriptions.<\/p>\n<p>But more support for industrial energy prices is needed. We need to see a targeted emergency package in key foundation industries in sectors including chemicals, glass and ceramics to protect jobs.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e8871b8f083643db211220#block-69e8871b8f083643db211220\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a>Britain overhauls energy regulator, granting it powers to ban executive bonuses<\/p>\n<p class=\"dcr-130mj7b\">Britain will overhaul its energy regulator Ofgem, the government said, as it granted it new powers to enforce consumer law and ban executive bonuses.<\/p>\n<p class=\"dcr-130mj7b\">The government hopes the changes will help restore consumer and industry confidence in the regulator, which has been criticised for not acting quickly enough to protect consumers from high energy prices.<\/p>\n<p class=\"dcr-130mj7b\">Under the changes, Ofgem will be able to enforce consumer law directly, bypassing what officials called a \u201clengthy courts process,\u201d to make sure customers get what they are owed when companies treat them unfairly. The watchdog will also be empowered to ban bonuses for energy executives who break the rules.<\/p>\n<p class=\"dcr-130mj7b\">Ed Miliband, the energy secretary, said the measures amounted to \u201ctough and fair\u201d action to fight for consumers\u2019 rights.<\/p>\n<p class=\"dcr-130mj7b\">The reforms will also streamline Ofgem\u2018s remit by transferring oversight of home upgrade schemes to the new Warm Homes Agency.<\/p>\n<p>A homeowner turns down the temperature of a gas boiler in Basingstoke, Hampshire.  Photograph: Andrew Matthews\/PA<\/p>\n<p class=\"dcr-130mj7b\">Since Ofgem was set up in 2000, the market has grown more complex, with a wider range of products and services for consumers to choose from, and growing numbers of customers in parts of the market which are covered by little, if any, regulation.<\/p>\n<p class=\"dcr-130mj7b\">That includes heating oil customers, who have seen prices spike following the start of the Iran war on 28 February. Last month the government announced funding worth over \u00a350m to support low-income families reliant on heating oil, and committed to introducing new consumer protections to the sector.<\/p>\n<p class=\"dcr-130mj7b\">Tim Jarvis, Ofgem\u2019s interim chief executive, said:<\/p>\n<p>double quotation markWe have delivered significant reforms in recent years, but this review enables us to make changes at a more systemic level to ensure we are delivering an energy system that works for consumers, that is attractive to investors and provides a stable, reliable environment for participants in the industry.<\/p>\n<p class=\"dcr-130mj7b\">Gillian Cooper, director of energy at Citizens Advice, said:<\/p>\n<p>double quotation markOfgem should now seize the opportunity to bring about a more innovative market, with better choices and protections for consumers, ensuring energy suppliers know there are real consequences for falling short.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e885058f084f159c366920#block-69e885058f084f159c366920\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p class=\"dcr-130mj7b\">Today\u2019s UK inflation data showed core inflation, excluding volatile items like energy, food, alcohol and tobacco, slowed to 3.1% last month from 3.2% in February.<\/p>\n<p class=\"dcr-130mj7b\">Inflation in the services sector, which is closely watched by the Bank of England, rose from 4.3% to 4.5%.<\/p>\n<p class=\"dcr-130mj7b\">Adam Hoyes, senior asset allocation analyst at the fund manager Rathbones, said:<\/p>\n<p>double quotation markThe increase in inflation in March captures the first effects of the conflict in the Middle East on UK households. While it may have temporarily reversed in April, inflation is still likely to be higher over the rest of 2026 than most expected at the start of the year. We think investors would be wise to take heed from recent events and prepare for a world of higher and more volatile inflation over the longer term.<\/p>\n<p>We think headline inflation will probably have eased back to around 3% again in April as hikes from this time last year in other \u2018regulated\u2019 prices, such as water bills, road tax, and rail fares drop out of the year-on-year calculation. But it\u2019s worth recalling that before the conflict erupted many were expecting inflation to be much closer to the 2% target in April. The outlook has changed materially.<\/p>\n<p class=\"dcr-130mj7b\">Turning to the outlook for interest rates, he said:<\/p>\n<p>double quotation markOne crumb of comfort for rate setters at the Bank of England will be that there were few signs of higher energy costs putting upward pressure on prices elsewhere in the economy yet\u2026 We expect these so-called \u2018second-round effects\u2019 to be weaker than after the energy price shock in 2022 given how different the economic backdrop is. With a much cooler labour market, workers don\u2019t have the same bargaining power to demand higher wages. Monetary and fiscal policy are both much less supportive than they were back then too. All else equal, that means the Bank of England has a bit more breathing room to wait and consider its response.<\/p>\n<p>Even so, we saw little evidence from today\u2019s data to allay our concerns about the persistence of services inflation, which preceded the war. One underlying measure we track that ignores the impact of \u2018regulated\u2019 and volatile services prices has essentially not budged for almost a year now, and remains materially above its long-run pre-pandemic average. At the margin, that will make policymakers more hesitant to resume interest rate cuts.<\/p>\n<p>The outlook for inflation and interest rates beyond April remains heavily dependent on developments in the Middle East and global energy markets. The latest change shift in the US position overnight highlights the difficulty of predicting how the situation will evolve with any certainty. For us, the main takeaway from recent events has been a stronger conviction in our long-held view that the world is likely to be a more unstable place, with inflation and interest rates higher and more volatile, than we became used to in the 2010s.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e87f6a8f084b3b353d9afe#block-69e87f6a8f084b3b353d9afe\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p>Updated at\u00a004.32 EDT<\/p>\n<p>Middle East war &#8216;could wipe out three quarters of chancellor&#8217;s headroom&#8217;<\/p>\n<p class=\"dcr-130mj7b\">A further escalation in the Middle East conflict could have a severe impact on government borrowing, with analysis suggesting the scenario would eradicate three-quarters of Rachel Reeves\u2019 fiscal headroom built up in the autumn budget.<\/p>\n<p class=\"dcr-130mj7b\"><a href=\"https:\/\/www.resolutionfoundation.org\/publications\/the-macroeconomic-policy-outlook-q2-2026\/\" data-link-name=\"in body link\" rel=\"nofollow noopener\" target=\"_blank\">The influential Resolution Foundation has fou<\/a>nd that a \u201csevere but plausible scenario\u201d, in which the conflict intensifies and delivers the largest hits to the economy, would result in government borrowing increasing by \u00a316bn a year in 2029-30.<\/p>\n<p class=\"dcr-130mj7b\">Reeves, the chancellor, built up fiscal headroom of \u00a321.7bn in the autumn budget, to be able to meet the fiscal rule that spending must be met by tax revenues.<\/p>\n<p class=\"dcr-130mj7b\">Living standards have been hit by the Iran war, with petrol prices surging 20% and energy bills forecast to rise by up to 20% in July, but there are fears about the wider economic impact on the UK.<\/p>\n<p class=\"dcr-130mj7b\">Inflation rose to 3.3% last month from 3% in February driven by higher petrol and diesel prices and air fares, official figures showed today.<\/p>\n<p class=\"dcr-130mj7b\">The thinktank said the chancellor should ensure planned support with energy bills is targeted and temporary, as unfunded universal support risks pushing interest rates higher.<\/p>\n<p class=\"dcr-130mj7b\">Borrowing \u00a320bn to provide additional support for households would push up mortgage rates by a 0.4 percentage points, the foundation\u2019s modelling showed.<\/p>\n<p class=\"dcr-130mj7b\">Simon Pittaway, senior economist at the Resolution Foundation, said:<\/p>\n<p>double quotation markNo-one knows which direction the current conflict in the Middle East will take but we do know that it will make us all poorer.<\/p>\n<p>The cost of filling up the car has already increased and, from July, so too will energy bills.<\/p>\n<p>The conflict is going to make the state poorer too. A deterioration in the conflict that sustains some of the worst hits to the economy could deal a \u00a316 billion hit to the public finances.<\/p>\n<p>The Chancellor deserves credit for building up enough of a buffer in last year\u2019s budget to withstand a hit of this scale. And by keeping any support with energy bills targeted and temporary, she should be able to weather this latest economic shock with her fiscal rules intact.<\/p>\n<p class=\"dcr-130mj7b\">Yvette Cooper, the foreign secretary, has again warned that the closure of the strait of Hormuz is \u201chitting the global economy\u201d, amid international efforts to safeguard the crucial shipping route.<\/p>\n<p class=\"dcr-130mj7b\">The Resolution Foundation said the impact of the conflict has so far been a lot more \u201cmuted\u201d compared to Russia\u2019s invasion of Ukraine, when gas prices rose 300p per therm, compared to a peak rise of 78p in March 2026.<\/p>\n<p class=\"dcr-130mj7b\">But it said the UK economy appears more vulnerable to the conflict than others because of its exposure to gas, which accounts for 62% of household energy consumption, and the \u201cheightened sensitivity\u201d of UK interest rates to global developments.<\/p>\n<p class=\"dcr-130mj7b\">Despite UK gross domestic product being \u201chalf as energy-intensive as the world average\u201d, both the International Monetary Fund and the Organisation for Economic Co-operation and Development downgraded UK growth by 0.5 percentage points this year \u2013 the biggest markdown of any member of the G7 group of advanced economies.<\/p>\n<p class=\"dcr-130mj7b\">The Resolution Foundation estimates that for a typical recent first-time buyer reaching the end of their fixed rate mortgage deal, costs have increased by around \u00a3100 since the start of the war.<\/p>\n<p class=\"dcr-130mj7b\">The government borrowing figures for the last financial year will be published by the Office for National Statistics on Thursday.<\/p>\n<p class=\"dcr-130mj7b\">A HM Treasury spokesperson said:<\/p>\n<p>double quotation markThe forecasts here are pure speculation. The impact of the conflict is, as the report\u2019s authors say themselves, highly uncertain.<\/p>\n<p>The report reinforces why we are right to focus on making the UK more resilient by securing greater energy security and improved public finances.<\/p>\n<p>We entered this conflict in a stronger position because of the choices this Government took to build economic stability. We are boosting our energy security, backing British industry and protecting households in a targeted and timely way.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e871948f08439bd407708c#block-69e871948f08439bd407708c\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p>Updated at\u00a005.59 EDT<\/p>\n<p>European stocks rise moderately, oil dips, hovering below $100 a barrel<\/p>\n<p class=\"dcr-130mj7b\">European stock markets have moved cautiously higher, with the exception of London\u2019s FTSE 100 index, which has dipped 0.1%.<\/p>\n<p class=\"dcr-130mj7b\">The UK\u2019s benchmark index fell 13 points to 10,484 in early trading.<\/p>\n<p class=\"dcr-130mj7b\">Germany\u2019s Dax rose nearly 0.5%, while France\u2019s CAC, Italy\u2019s FTSE MIB and Spain\u2019s Ibex all added 0.2%.<\/p>\n<p class=\"dcr-130mj7b\">Brent crude has dipped 0.5% to $98.03 a barrel.<\/p>\n<p class=\"dcr-130mj7b\">Donald Trump unilaterally extended the ceasefire between the US and Iran, but the US continues its blockade of Iranian ports, and the strait of Hormuz remains closed.<\/p>\n<p class=\"dcr-130mj7b\">There are reports that a container ship off the coast of Oman was fired at by an Islamic Revolutionary Guard Corps gunboat, according to the United Kingdom Maritime Trade Operations.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e8774f8f08439bd40770a7#block-69e8774f8f08439bd40770a7\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a>Condom prices could rise 30% due to Iran war, says world\u2019s top producer Karex<\/p>\n<p class=\"dcr-130mj7b\">Condoms are also going up in price. The world\u2019s top condom producer, Malaysia\u2019s Karex, plans to raise prices by 20% to 30% and possibly further if supply chain disruptions drag on due to the Iran war, its chief executive has said.<\/p>\n<p class=\"dcr-130mj7b\">Karex is also seeing a surge in condom demand as rising freight costs and shipping delays have left many of its customers with lower stockpiles than usual, CEO Goh Miah Kiat told Reuters.<\/p>\n<p>double quotation markThe situation is definitely very fragile, prices are expensive \u2026 We have no choice but to transfer the costs right now to the customers.<\/p>\n<p class=\"dcr-130mj7b\">Karex produces more than 5 billion condoms annually and is a supplier to leading brands like Durex and Trojan, as well as national health systems such as the UK\u2019s <a href=\"https:\/\/www.theguardian.com\/society\/nhs\" data-link-name=\"in body link\" rel=\"nofollow noopener\" target=\"_blank\">NHS<\/a> and global aid programmes run by the United Nations.<\/p>\n<p class=\"dcr-130mj7b\">Since <a href=\"https:\/\/www.theguardian.com\/world\/us-israel-war-on-iran\" data-link-name=\"in body link\" rel=\"nofollow noopener\" target=\"_blank\">the conflict began<\/a> in late February, Karex has seen costs increase for everything from synthetic rubber and nitrile used in manufacturing condoms to packaging materials and lubricants such as aluminium foils and silicone oil, Goh said.<\/p>\n<p>Durex condoms in kitchen drawer. Photograph: Graeme Robertson\/The Guardian<a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e8765e8f084f159c3668d1#block-69e8765e8f084f159c3668d1\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p class=\"dcr-130mj7b\">Peter Dixon, senior economist at the National Institute of Economic and Social Research, a respected think tank, said:<\/p>\n<p>double quotation markWhile inflation may fall back in April due to base year effects, it will climb further in the course of 2026, remaining well above the Bank of England\u2019s target.<\/p>\n<p>The monetary policy committee\u2019s dilemma in the coming months is whether it should look through what may only be a temporary rise in inflation, or whether it will need to tighten policy to tackle second round effects [on wages].<\/p>\n<p>On the one hand, rising energy prices will add to inflation over the rest of the year. However, the labour market is broadly in balance, so second round inflation effects are likely to be relatively muted.<\/p>\n<p>Nevertheless, the MPC cannot risk appearing complacent, and we therefore expect one precautionary 25 basis point rate increase over the coming months.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e86f018f08439bd4077073#block-69e86f018f08439bd4077073\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a>Food inflation picks up<\/p>\n<p class=\"dcr-130mj7b\">Food inflation has also picked up again, to an annual rate of 3.7% last month, up from 3.3% in February.<\/p>\n<p class=\"dcr-130mj7b\">Chocolate and confectionery, meat, fish, and soft drinks became dearer, while bread and cereals, and dairy products pulled the inflation rate lower.<\/p>\n<p class=\"dcr-130mj7b\">The Food and Drink Federation has crunched the numbers.<\/p>\n<p class=\"dcr-130mj7b\">Prices rose the fastest for beef and veal (18.8%), whole milk (12.7%) and confectionary products (11.1%).<\/p>\n<p class=\"dcr-130mj7b\">Prices fell for nine categories, with the largest drops for: flours (-6.8%), olive oil (-6.2%), and pizza (-2.6%).<\/p>\n<p class=\"dcr-130mj7b\">It will take 7-12 months for cost pressures on manufacturers to feed through to consumers<\/p>\n<p class=\"dcr-130mj7b\">Liliana Danila, chief economist at the FDF, said:<\/p>\n<p>double quotation markThe clouds are gathering, but the storm has not yet broken on rising food and drink inflation. The war in Iran has delivered a cost shock that is already too large for manufacturers to absorb in full. The impact on prices will take time to work its way through the system, but it\u2019s only a matter of time before it does. For manufacturers, long-term contracts with suppliers and retailers mean it can take up to a year for higher costs to be fully passed through. But where products are less processed, or supply chains are shorter, prices will move more quickly. As a result, absent of any government intervention, we expect a gradual but persistent pickup in food inflation, reaching around 9%\u201310% by the end of the year.<\/p>\n<p>This means we\u2019re in a crucial window for action to limit the impact on shoppers. We\u2019re working with government to look at the levers they can pull now to support food manufacturers now to soften the blow on consumers later in the year.<\/p>\n<p class=\"dcr-130mj7b\">In better news for consumers, clothing prices fell by 0.8% in the 12 months to March, compared with a rise of 0.9% in the 12 months to February, marking the lowest recorded since March 2021, when prices were affected by the Covid-19 pandemic.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e86b038f08439bd407706b#block-69e86b038f08439bd407706b\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p>Updated at\u00a002.37 EDT<\/p>\n<p>UK diesel and petrol prices jump, air fares also rise<\/p>\n<p class=\"dcr-130mj7b\">The average price of petrol rose by 8.6p a litre between February and March, compared with a fall of 1.6p a litre a year earlier. The average price was 140.2p a litre, the highest since August 2024, the ONS said.<\/p>\n<p class=\"dcr-130mj7b\">Diesel prices rose even more, by 17.6p a litre, compared with a drop of 1.6p a litre this time last year. The average price stood at 158.7p a litre, the highest since November 2023.<\/p>\n<p class=\"dcr-130mj7b\">Air fares also increased, by 10% between February and March, compared with a fall of 0.3% a year ago. It was the largest monthly increase between February and March since 2016, when it was 22.9%. The upward effect came almost entirely from long haul routes, where the return flights were on the Tuesday immediately after the Easter weekend.<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e8685a8f084b3b353d9a70#block-69e8685a8f084b3b353d9a70\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p>Updated at\u00a002.29 EDT<\/p>\n<p>UK inflation climbs to 3.3%, driven by largest increase in fuel prices in over three years \u2013 business live<\/p>\n<p class=\"dcr-130mj7b\">Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.<\/p>\n<p class=\"dcr-130mj7b\">It\u2019s UK inflation day!<\/p>\n<p class=\"dcr-130mj7b\">Inflation in the UK accelerated to 3.3% in March driven by higher fuel prices because of the Iran war.<\/p>\n<p class=\"dcr-130mj7b\">The annual inflation rate rose from 3% in February, according to the Office for National Statistics.<\/p>\n<p class=\"dcr-130mj7b\">On a monthly basis, consumer prices rose 0.6% in March, compared with a rise of 0.3% in March 2025. Motor fuels were the biggest factor behind the increase, while clothing made a downward contribution to inflation.<\/p>\n<p class=\"dcr-130mj7b\">Transport inflation, including motor fuels and airfares which also rose, almost doubled to 4.7% in March, from 2.4% in February, the highest recorded since December 2022.<\/p>\n<p class=\"dcr-130mj7b\">Asian stock markets mostly rose as did US stock futures, and oil prices fell after Donald Trump said he would extend the two-week ceasefire with Iran, amid frantic efforts to bring the two sides back to the negotiating table.<\/p>\n<p class=\"dcr-130mj7b\">Japan\u2019s Nikkei and China\u2019s CSI 300 both rose 0.4% while Hong Kong\u2019s Hang Seng fell 1.4%.<\/p>\n<p class=\"dcr-130mj7b\">The US military maintained its blockade of Iranian ports, and Iran has said the US must end it in order for negotiations to resume.<\/p>\n<p class=\"dcr-130mj7b\">Brent crude has fallen 1.1% to $97.37 a barrel, but remains near $100 a barrel, with the strait of Hormuz still closed.<\/p>\n<p class=\"dcr-130mj7b\">The Agenda<\/p>\n<p class=\"dcr-130mj7b\">9.30am BST: UK house prices and rents<\/p>\n<p class=\"dcr-130mj7b\">Noon BST: US MBA mortgage applications<\/p>\n<p class=\"dcr-130mj7b\">3pm BST: Eurozone consumer confidence<\/p>\n<p><a href=\"mailto:?subject=Middle East war \u2018could wipe out 75% of chancellor\u2019s budget headroom\u2019; UK inflation climbs to 3.3% \u2013 business live&amp;body=https:\/\/www.theguardian.com\/business\/live\/2026\/apr\/22\/uk-inflation-increase-fuel-prices-oil-falls-trump-ceasefire-extended-business-live-news-updates?CMP=share_btn_url&amp;page=with%3Ablock-69e861af8f08439bd4077039#block-69e861af8f08439bd4077039\" type=\"button\" class=\"dcr-1mulgdf\">Share<\/a><\/p>\n<p>Updated at\u00a003.57 EDT<\/p>\n","protected":false},"excerpt":{"rendered":"Key events Show key events only Please turn on JavaScript to use this feature Lisa O\u2019Carroll The European&hellip;\n","protected":false},"author":2,"featured_media":544530,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":{"0":"post-544529","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/544529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=544529"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/544529\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/544530"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=544529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=544529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=544529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}