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UK Inflation May Surpass 3% Amid Energy Price Crisis

3/11/2026

46 6 Full Breakdown

Summary

Story summary

The Office for Budget Responsibility warns UK inflation may exceed 3% by year-end due to Iran-linked energy prices.
Professor David Miles says prices could rise by one percentage point.
This could create a £13 billion spending gap for Chancellor Rachel Reeves.
Chancellor Rachel Reeves criticized petrol retailers for price gouging.
The OBR warned that without changes, government departments may face real-term cuts ahead of the 2027 Spending Review.

History

Historical Context

The 1973 Oil Crisis began when OAPEC imposed an embargo in response to U.S. support for Israel during the Yom Kippur War, causing oil prices to quadruple and triggering global inflation. This crisis marked a significant economic downturn, leading to austerity measures reminiscent of today's concerns over rising energy prices linked to geopolitical tensions, particularly with Iran, which could similarly impact inflation rates.

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Story summary

The Office for Budget Responsibility warns UK inflation may exceed 3% by year-end due to Iran-linked energy prices.
Professor David Miles says prices could rise by one percentage point.
This could create a £13 billion spending gap for Chancellor Rachel Reeves.
Chancellor Rachel Reeves criticized petrol retailers for price gouging.
The OBR warned that without changes, government departments may face real-term cuts ahead of the 2027 Spending Review.

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