Ministers have warned Brits will face higher prices until at least next year from the Middle East crisis.
Darren Jones said the fallout from ‘what Trump has done’ would have a ‘long tail’ even if the Strait of Hormuz reopens immediately – which seems unlikely.
Fielding broadcast questions for the Government this morning, Mr Jones said the impact would include higher costs for energy, food and holidays.
The grim assessment came with little sign of an end to the standoff, with Mr Trump having cancelled a trip by senior officials for negotiations hosted by Pakistan.
Keir Starmer told the President in a call this afternoon that there is an ‘urgent need’ to reopen the crucial shipping passage – through which around a fifth of the world’s oil and gas typically passes.
A Downing Street readout said: ‘The leaders discussed the urgent need to get shipping moving again in the Strait of Hormuz, given the severe consequences for the global economy and cost of living for people in the UK and globally.’
That has already forced up pump prices for petrol and diesel as well as putting pressure on jet fuel, but the full effects have yet to feed into the supply chain.
Darren Jones said the fallout from ‘what Donald Trump has done’ would have a ‘long tail’ even if the Strait of Hormuz reopens immediately – which seems unlikely
The grim assessment came with little sign of an end to the standoff, with Mr Trump (pictured) having cancelled a trip by senior officials for negotiations hosted by Pakistan
The Middle East is a crucial source for products such as fertiliser and CO2, which is used in agriculture, industry and medicine.
Speaking on the BBC’s Sunday with Laura Kuenssberg, Mr Jones played down the prospect of shortages in the shops.
But he said: ‘You are going to see prices go up a bit as a consequence of what Donald Trump has done in the Middle East.
‘That’s probably going to come on line not just in the next few weeks, but in the next few months. There’s going to be a long tail from this.’
Pressed on how long that would be, Mr Jones said: It really depends on how long the negotiations take to unblock the Strait of Hormuz…
‘I think our best guess is eight plus months from the point of resolution that you will see economic impacts coming through the system.’
He added: ‘People will see higher energy prices, food prices, those types of issues – flight ticket prices – as a consequence of what Donald Trump has done in the Middle East.’
The Government’s Middle East Response Committee is due to meet again on Tuesday with stock levels of goods being closely monitored.
However, officials are adamant that people should continue to fill their cars as normal, that jet fuel is still arriving for planes, and that there is enough CO2 available.
The IMF has warned that the UK will be among the worst hit by the disruption in the Middle East.
Official figures released last week showed the headline CPI rate of inflation for March rising to 3.3 per cent in a first sign of the economic consequences of the US-Israeli war.
That was up from 3 per cent in February, and the highest annual level since December. Until the Middle East crisis erupted there had been hopes inflation would be returning to the Bank of England’s 2 per cent target soon, paving the way for interest rate cuts.
The Office for National Statistics (ONS) said higher motor fuel was the main driver of the increase, up by 8.7 per cent month-on-month. There has not been a larger increase since June 2022, in the wake of the Russian invasion of Ukraine.
The numbers have heaped pressure on Rachel Reeves to support struggling families, but she has insisted she will wait until the effects become clearer.
