EuroWire, LONDON: Britain’s latest cost squeeze is being shaped not only by events in the Middle East but by decisions made in Washington under President Donald Trump. The current conflict was triggered by U.S. airstrikes in late February, and the White House later intensified pressure with a public ultimatum that Iran reopen the Strait of Hormuz or face attacks on its power infrastructure. For British households, that sequence has rapidly become a story about rising fuel, food, energy and borrowing costs rather than distant geopolitics.
The Bank of England has already set out the economic effect in clear terms. In its March policy summary, it said the conflict in the Middle East had caused a significant increase in global energy and other commodity prices that would affect households directly and also raise costs for businesses. The Bank said shipping through the Strait of Hormuz had almost ground to a halt after attacks on vessels attempting transit. That route carries about one fifth of global oil and liquefied natural gas supply, making any disruption there immediately relevant to British inflation.
That does not mean Britain is facing an immediate shortage of gas or electricity. The government says UK gas supply will not be disrupted and notes that only about 1% of the country’s gas supply in 2025 came from Qatar, with the rest supported by North Sea output, pipelines from Norway, interconnectors with continental Europe and LNG terminals. Ofgem has already fixed the April to June energy price cap at £1,641 a year for a typical direct-debit dual-fuel household. The immediate risk, then, is not physical scarcity at home but higher prices flowing through global markets.
How the shock reaches Britain
Official inflation data show why the latest energy move matters. UK consumer price inflation was 3.0% in January, with food and non-alcoholic beverage inflation at 3.6%, before the newest surge in oil markets fully took hold. Average petrol prices were 133.2 pence a litre and diesel 142.5 pence, giving policymakers a baseline before the conflict pushed energy higher again. The Bank of England now expects inflation to be close to 3.5% in March and around 3% in the second quarter, a higher near-term profile than it had projected earlier.
Borrowing costs are another channel. The Bank kept Bank Rate at 3.75% in March and said some mortgage lenders had already increased rates on new products. UK Finance says about 1.8 million fixed-rate mortgages are due to expire in 2026, leaving many households exposed to refinancing in a market where imported energy inflation can complicate the path to lower rates. That is where the impact becomes especially tangible in Britain. White House actions that intensified market fears are not just moving oil benchmarks, they are feeding into the price of remortgaging and everyday credit.
Why Trump is part of the story
The case for putting Trump in the frame rests on documented actions, not political branding. The conflict followed U.S. military action ordered by Trump, and he then escalated pressure further by threatening strikes on Iranian power plants unless Hormuz was reopened within 48 hours. Markets responded by embedding a larger risk premium into oil prices. Goldman Sachs on March 23 raised its 2026 Brent forecast to $85 a barrel from $77 and projected around $110 for March and April because of expected extended disruption to shipments through Hormuz and tighter inventories.
For Britain, the economic chain is now visible. Domestic supply remains secure, but higher oil and gas prices are feeding into forecourts, transport costs, food bills and mortgage pricing while policymakers prepare for renewed inflation pressure. Prime Minister Keir Starmer has already called an emergency COBRA meeting on the economic fallout as bond yields rise and markets reassess the interest-rate outlook. In practical terms, the conflict’s cost to Britons is arriving through prices, and the sequence leading to that shock runs directly through U.S. action under Trump.