British PM Keir Starmer touts cost of living help to ease Iran war pressure

LONDON – British Prime Minister Keir Starmer sought to draw attention to how his government is helping Britons with the rising cost of living, even as he faces growing pressure to announce further support because of the economic effects of the Iran crisis.

“I know the public are concerned about the conflict in Iran and what it means for them and their families,” Mr Starmer said in a statement issued by 10 Downing Street.

The statement also highlighted previously-announced measures taking effect on April 1, including an increase in the minimum wage, a freeze on prescription prices and a reduction in energy bills through to July. 

“I want to reassure them that they have a government on their side, working with allies on de-escalation and bearing down on the cost of living,” the prime minister added.

Mr Starmer has tried to convey a sense of action on the economic hit from the Iran war, such as convening roundtables with business leaders and holding emergency meetings with his ministers and Bank of England Governor Andrew Bailey.

But he has yet to announce a major new package to help Britons with rising prices. 

The cost of filling up a diesel-powered family car in Britain has passed £100 (S$170.36), the RAC said on March 31, and average household energy bills are to increase by 18 per cent from July, according to analysts at Cornwall Insight.

Chancellor of the Exchequer Rachel Reeves suggested on the morning of April 1 that the government will wait longer before subsidising energy bills.

“From July to September, gas usage, especially by families and pensioners, is the lowest of any months of the year, because it is the summer months,” Ms Reeves told the BBC.

“At the moment we’re working on a range of contingencies, and we are looking at more targeted measures,” she added, with any support being based on people’s incomes.

There could be further relief if the Middle East conflict subsides.

Overnight, US President Donald Trump said the US will stop attacks within “maybe two weeks, maybe three”.

Brent crude dropped below US$100 a barrel on the morning of April 1.

Still, the Iran war has frustrated a key thrust of Mr Starmer’s strategy, which was to herald 2026 as the year that voters started to feel the benefits of his Labour administration, through measures such as the minimum wage increase and a decision to cut energy bills made in the Chancellor’s last budget.

Instead, Mr Starmer’s cost-of-living campaign has been blown off course, with inflation expectations pushed up by soaring oil and gas prices and traders pricing in three interest rate hikes in 2026, having previously expected cuts.

The Food and Drink Federation said on April 1 that UK food inflation will surpass 9 per cent by the end of the year.

“We must go further to bear down on costs,” Mr Starmer said in the statement.

“That means pushing for de-escalation in the Middle East and a reopening of the Strait of Hormuz. That is the best way we can bring down the cost of living for families and that is my focus.”

As part of the government’s efforts on the economic impact of the Iran conflict, Ms Reeves and Business Secretary Peter Kyle are also planning to meet regulators and supermarket company executives on April 1 to discuss “work to ensure markets continue to function properly and protect consumers,” according to the Treasury.

In the absence of a major new intervention from Mr Starmer, the UK’s main opposition Conservative Party has been calling on the premier to step up drilling in the North Sea to secure more energy supplies, while Mr Nigel Farage’s poll-leading Reform UK on March 31 proposed scrapping air passenger duty on short-haul flights to ease living costs.

So far, Mr Starmer’s government has said it is considering its options on any further potential economic response, arguing that it’s too early to assess the full impact of the war and that the price cap on gas and electricity until July provides an immediate protection for most households. 

The prime minister has also said that any help would be concentrated on the neediest people, appearing to rule out a universal-style bailout like that delivered by the previous Conservative government at the time of Russia’s invasion of Ukraine in 2022. BLOOMBERG