Latest UK-focused news and updates.
Concerns over stagflation are escalating in the UK as the ongoing conflict in Iran drives oil prices above $100 per barrel. The situation has intensified following Iranian strikes on economic targets across the Middle East, leading to a significant surge in energy costs.
In the UK, the month-ahead gas contract has increased by 4.2%, now priced at 132.6 pence per therm. Similarly, European gas prices have also risen, with the continental equivalent up by 3.2% to €51.6 per megawatt hour. These rising energy costs are contributing to fears of stagnant economic growth coupled with inflation, a scenario known as stagflation.
The conflict has not only affected oil prices but has also benefitted Russia, which has reportedly earned €6 billion from fossil fuel exports since the war began. This increase in revenue is attributed to a drop in supplies from the Middle East, allowing Russia to capitalize on the market's volatility.
As the UK grapples with these economic challenges, the Bank of England's Governor, Andrew Bailey, has emphasized the need for stability in the face of rising inflation and global economic pressures. The situation remains fluid, and further developments are anticipated as the conflict continues to unfold.
Source: www.theguardian.com – https://www.theguardian.com/business/live/2026/mar/12/stagflation-fears-escalating-iranian-war-oil-price-andrew-bailey-stability-us-jobless-claims-news-updates