Price hikes as a result of the Iran war will be felt for at least eight months after the conflict ends, a government minister has warned.
Chief Secretary to the prime minister, Darren Jones, warned people will see higher energy, food and flight prices “as a consequence of what Donald Trump has done in the Middle East” and said there will be a “long tail from this”.
The government has stepped up planning for how to offset potential shortages sparked by the conflict, following the closure of the Strait of Hormuz, a key shipping lane crucial for the supply of a fifth of global oil and gas, which sent oil prices soaring.
The prime minister will chair another meeting of the Cabinet committee set up to deal with the fallout on Tuesday, after the so-called Middle East Response Committee met last week.
Meanwhile, a contingency planning group of ministers led by Mr Jones is meeting twice a week. They are focusing on live monitoring of stock levels and seeing what plans are in place to address supply chain disruption.
But Mr Jones told the BBC that consumers are more likely to see prices go up rather than gaps on supermarket shelves as a consequence of the conflict.
“Quite frankly, that’s probably going to come online, not just in the next few weeks, but the next few months. There’s going to be a long tail from this”, he said.
Pressed on how long people will see economic disruption, Mr Jones said: “I think our best guess is eight plus months from the point of resolution that you’ll see economic impacts coming through the system.
“So people will see higher energy prices, food prices and those types of issues, flight ticket prices as a consequence of what Donald Trump has done in the Middle East.
“The government here in the UK, the work that I’m doing with the prime minister is looking at all of those things and saying, ‘what can we do within our power to help people to get through those difficult times?’”.
Oil and gas prices have increased sharply since the conflict began at the end of February.
And earlier this month, the Bank of England warned that around 1.3 million more UK households are facing a jump in their mortgage costs following the economic shock caused by the conflict.
The Bank’s latest financial stability report (FSR) said the UK economic outlook has “deteriorated”, increasing pressure on UK households and businesses.
The government has been seeking to calm the public, urging drivers to keep filling up with petrol and not to change their travel plans amid fears over potential jet fuel shortages.
It comes after leaked government documents last week revealed the UK could see shortages of key supermarket goods this summer if the Iran war continues.
Officials have put together contingency plans for a “reasonable worst-case scenario”, highlighting that the closure of the crucial Strait of Hormuz shipping route could lead to carbon dioxide shortages.
The secret analysis – first reported by The Times – was codenamed “Exercise Turnstone” and was run by the government’s emergency committee, Cobra.
The “reasonable worst-case scenario” was based on the assumption that the Strait of Hormuz had not been reopened and no peace deal had been reached.
It warned supplies of CO2 could fall to just 18 per cent of current levels – a warning based on a key UK plant suffering a mechanical error, and high gas costs leading to a fall in production across Europe of ammonia and fertiliser, which make CO2 as a by-product.
Farming and hospitality would be the two worst-hit industries, because CO2 is used to prolong the shelf life of foods, including salad, packaged meats, and baked goods.
Supermarkets have since said they are working with the government to plan for a worst-case scenario where food producers would be impacted.
