Healey Orders Officials to Soften Energy Price Blow Amid Iran Conflict Fears

Chancellor John Healey has directed officials to develop options for targeted assistance on energy bills in next month's Budget, amid concerns that the conflict in Iran could lead to a cost of living crisis for millions this winter.

Wholesale gas prices have surged by over 150% since the start of the conflict, while oil prices have increased by more than 40%, according to figures compiled for the Government.

Energy bills could be more than £600 higher next year compared to when Labour came to power, despite their pledge to cut them by £300 by the end of the decade.

Ministers are interested in exploring more targeted intervention, but any additional energy relief packages would put pressure on raising funds at the Budget through taxation.

Clare Lombardelli, a deputy governor at the Bank of England, warned that an interest rate rise was 'increasingly likely' if energy prices remain elevated.