{"id":785800,"date":"2026-09-29T00:08:09","date_gmt":"2026-09-29T00:08:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/785800\/"},"modified":"2026-09-29T00:08:09","modified_gmt":"2026-09-29T00:08:09","slug":"record-diesel-costs-add-fresh-pressure-on-uk-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/785800\/","title":{"rendered":"Record Diesel Costs Add Fresh Pressure on UK Economy"},"content":{"rendered":"

The UK economy entered \u201cuncharted territory\u201d on Monday, battling an assortment of financial pressures as fears intensified ahead of the next Budget<\/a>.\u00a0<\/p>\n

Diesel costs surged to a record high of 199.18p per litre, marking the latest energy shock on the UK economy. Stations were registered as charging 199.18p per litre, according to the RAC. The automotive firm said the price jump reflected \u201cjust how exposed the UK is to events occurring far away\u201d.<\/p>\n

Brent crude \u2013 the international benchmark for oil prices \u2013 also tipped above $96 per barrel after a four per cent jump on Monday morning. This followed renewed uncertainty around peace between the US and Iran after Trump rejected a proposal that sought to reopen the Strait of Hormuz.<\/p>\n

\u201cUK fuel costs have now entered unchartered territory, and there will be rising concerns about the economic impact, and how the Bank of England will react,\u201d Kathleen Brooks, research director at XTB, said.<\/p>\n

The rising pressures came as Chancellor John Healey<\/a> took to the stage at the Labour party conference to deliver his keynote address.\u00a0<\/p>\n

Borrowing costs up as Chancellor pledges discipline<\/p>\n

The two-year gilt yield \u2013 a gauge of short-term interest rate<\/a> expectations \u2013 was up six basis points to 4.75 per cent as Healey delivered his speech. Meanwhile the 10-year, which indicates how much interest the government will pay to borrow, was up five basis points to 5.4 per cent \u2013 a whisker away from breaching the 19-year high recorded earlier in the month of 5.41 per cent.<\/p>\n

The geopolitical tensions in the Middle East have weighed on global yields, but the domestic uncertainty in the UK ahead of October\u2019s Budget is adding additional hesitancy for investors.<\/p>\n

Angeline Ong, senior technical analyst at IG, said Burnham\u2019s refusal for \u201ccrude cuts\u201d to welfare leaves the market \u201cwondering where the fiscal credibility is going to come from\u201d.<\/p>\n

\u201cVoters and investors want fiscal clarity, but at the moment what they are getting is a credibility gap.\u201d<\/p>\n

Healey said on Monday the money Labour had in the 90s was \u201csimply not there now\u201d as he took aim at the Conservatives for \u201closing control of British finances\u201d.<\/p>\n

The Chancellor said he would balance the books by maintaining \u201ca buffer against uncertainty, controlling borrowing to bring down inflation, and reducing long term pressures on our finances.\u201d<\/p>\n

By City AM<\/a><\/p>\n

More Top Reads From Oilprice.com<\/p>\n

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