British households face income squeeze as energy prices surge amid Mideast tensions

London, April 13, 2026
Surging energy prices triggered by escalating tensions in the Middle East are set to weigh on British households, with new analysis pointing to a deterioration in living standards as global oil markets remain volatile.

According to a report released Monday by the Resolution Foundation, the median working-age households in Britain are projected to be about 480 pounds (about 650 US dollars) worse off over the current financial year than previously expected, as higher energy costs push up inflation and erode real incomes.

The think tank said typical household income, once forecast to grow by 0.9 per cent, is now expected to decline by 0.6 per cent, underscoring the broad impact of higher energy costs, Xinhua news agency reported.

Global energy markets have been jolted by renewed geopolitical tensions. Brent crude futures surged 7 per cent to around 101 US dollars per barrel on Monday after US President Donald Trump announced a blockade of the Strait of Hormuz following failed negotiations with Iran.

The strategic waterway, a key chokepoint for global oil shipments, has effectively remained closed since the conflict began, driving sharp gains in oil and gas prices and heightening concerns over inflation and global growth.

“Despite hopes for a sustained peace, the path of this conflict remains uncertain and energy prices remain well above pre-war levels, meaning many households face a decline in their purchasing power this year,” said James Smith, the foundation’s chief economist.

The Resolution Foundation has urged the government to accelerate plans for a “social tariff” to help cushion lower-income groups, particularly ahead of winter when energy demand is expected to peak.

UK Prime Minister Keir Starmer on Monday termed the closure of the Strait of Hormuz “deeply damaging” and stressed that movement of global shipping is important for easing cost of living pressures.

“The ongoing closure of the Strait of Hormuz is deeply damaging. Getting global shipping moving is vital to ease cost of living pressures. The UK has convened more than 40 nations who share our aim to restore freedom of navigation.

This week the UK and France will co-host a summit to advance work on a coordinated, independent, multinational plan to safeguard international shipping when the conflict ends,” Starmer posted on X.(Agency)