Britain must be ready for the shocks of war ‘for some time’, Starmer warns – reigniting cost of living worries as Cobra meeting aims to get a grip on inflation

Sir Keir Starmer warned on Monday that an Iran war could reignite the cost of living crisis for months.

The Prime Minister called an emergency Cobra meeting on Monday night to discuss the impact of the conflict on inflation and energy bills.

In a sign of concerns that the wider economy will be affected, Bank of England Governor Andrew Bailey also attended the meeting in Downing Street.

The Prime Minister has previously warned MPs that he does not want to offer ‘false comfort’ by suggesting the war will ‘end quickly and early’, despite claims that Donald Trump is working on a deal with the ‘leadership’ in Tehran.

Sir Keir revealed ministers are drawing up contingency plans to offer targeted help with energy bills next winter. Asked how long he thought the crisis would last, the Prime Minister told the liaison committee: ‘To be honest, it is difficult to answer this question.

‘I think all our focus and energy should be on rapid de-escalation, but we should plan on the basis that this could continue for some time. ‘Since the conflict began, I have made it clear to the team that we must not lull ourselves into a false sense of comfort, thinking that this will surely end quickly and early.’

Chancellor Rachel Reeves will brief MPs on Tuesday on measures to strengthen competition authorities to prevent profiteering, as well as proposals to speed up the construction of renewable and nuclear energy.

But sources said an immediate rescue package would not be possible for families and businesses struggling with rising bills.

The head of the International Energy Agency says the impact of closing the Strait of Hormuz could be worse than two oil shocks in the 1970s

And Sir Keir downplayed the possibility of a comprehensive support plan being rolled out following Russia’s full-scale invasion of Ukraine in 2022.

Oil and gas prices were in turmoil on Monday before Mr. Trump suddenly claimed he had agreed with Tehran to a five-day ceasefire against attacks on energy targets.

But experts fear energy prices could remain high for months as Iran terrorizes shipping in the Gulf.

The impact of closing the Strait of Hormuz could be worse than the two oil shocks of the 1970s and the gas shortage that followed Russia’s invasion of Ukraine, the head of the International Energy Agency said.

General Manager of the institution, Fatih Birol, stated that the situation was ‘very serious’ and added: ‘Many of us remember the two consecutive oil crises in the 1970s. During that period, the world lost approximately five million barrels per day in each crisis; together, ten million barrels per day. As of today, we have lost 11 million barrels per day; This is more than just the combination of two major oil shocks.

‘No country will be immune from the effects of this crisis if it continues to go in this direction.’

Sir Keir stressed that household energy bills will fall next month and then be capped by the end of June. Analysts Cornwall Insight predict the energy price cap could rise by £332 in July.

The Prime Minister said the Government could then step in and offer help to some families struggling with bills. But he said ministers were also working on ways to offset a potential rise in bills in October, which could have a crippling effect on people trying to stay warm next winter.

As concerns grow, 10-year bond interest rates rose again this morning

Premier FTSE 100 continues its decline, losing more than 1,100 points since the end of February

But he claimed the country could no longer afford the support introduced by the Conservatives in 2022, which caps energy bills but costs taxpayers around £40bn.

‘I am acutely aware of the state of the public finances,’ he said. ‘There are challenges because we don’t know the extent of the challenge we face because we don’t know when this conflict will end, but we are actively looking at what measures we can put in place.’

Sir Keir said ministers were looking at possible support for businesses whose bills were not covered by the energy price cap. Some firms will face a 40 percent increase in their fixed wages by next week.

The Chancellor will give the Competition and Markets Authority ‘more teeth’ to root out profiteering, the Prime Minister said.

He will also announce plans to sign up ‘critical’ energy security projects to prevent them from coming to a halt if they face legal challenges.

Ms Reeves will insist ‘obstructionists’ must not be allowed to block action to wean Britain off oil and gas.