Families bearing cost of instability, says Chancellor amid US Iran blockade

Families and businesses across Britain are bearing the cost of instability “they did not cause”, the Chancellor has said amid UK-led moves to reopen the strategic Strait of Hormuz.

Rachel Reeves made her comments as she heads to the International Monetary Fund’s spring meetings in Washington DC, where she is set to urge coordinated action to tackle the global economic shock caused by the Iran conflict, which has seen a spike in energy prices.

The war could leave the average UK household £480 worse off over the current financial year, the Resolution Foundation think tank has said.

The IMF is due to publish its world economic outlook later, with updated growth and inflation forecasts around the globe.

It comes as Donald Trump’s blockade of Iranian ports came into effect, with the US president threatening to “eliminate” Tehran’s fast attack vessels if they come near American warships.

Sir Keir Starmer will chair Cabinet on Tuesday morning, where the conflict and its fallout are likely to feature high on the agenda.

He has refused to back the operation and was instead working with French President Emmanuel Macron to bring together an international coalition aimed at securing future freedom of navigation in the strait, a vital route for global oil and gas supplies from the Gulf.

The Prime Minister told MPs the summit of world leaders later this week would focus on diplomatic efforts to reach a “negotiated end to the conflict” and the reopening of the critical waterway, which had become a “running sore” to the world.

Military planning would also be undertaken “to provide assurance to shipping as soon as a stable environment can be established”.

Sir Keir said: “I’m very concerned about the impact that this war is having on people back in the United Kingdom who’ve obviously played no part in the war, but I don’t want them paying the price.

“So that’s my primary focus.”

His comments were echoed by the Chancellor, who said: “Families and businesses across Britain are bearing the cost of instability they did not cause. These are not costs I wanted, but they are costs we will have to respond to.

“The Iran conflict must be a line in the sand on how we deal with global crisis and instability.

“I will go to America with a clear message: global leaders must take co-ordinated economic action and supercharge the path to energy security to protect ourselves in the future.”

Separately, Deputy Prime Minister David Lammy met with US vice president JD Vance and secretary of state Marco Rubio in Washington DC where they discussed the current crisis in the strait.

Amid a fragile ceasefire, Mr Lammy is understood to have highlighted the role the UK is playing in the international effort to ensure shipping can pass freely through the maritime pinchpoint.

Meanwhile, defending his actions, Mr Trump said: “We can’t let a country blackmail or extort the world because that’s what they’re doing.”

However, he insisted Iran wants to strike an agreement but did not give further details.

Speaking at an impromptu news conference at the White House later on Monday, the president said: “We’ve been called this morning by the right people, the appropriate people, and they want to work a deal.”

Vice president JD Vance told Fox News negotiations in Pakistan “did make some progress” on Iran’s nuclear programme.

He said he felt negotiators were “unable to cut a deal” without receiving approval from Tehran and that it was up to Iran to “take the next step”.