UK inflation held at 3% before global energy price hit from Iran war
The UK inflation rate held steady at 3% in February, before Donald Trump’s Iran war drove up global energy costs, threatening a renewed price jump.Official figures showed the consumer prices index remained at the same level as the previous month, in line with economists’ expectations but still well above the government’s 2% target.The annual rate of food inflation fell slightly, driven by drops in olive oil, flour and pizza, but the Food and Drink Federation warned this was likely to be “the calm before the storm”.The outlook for inflation has shifted dramatically since the onset of the Middle East conflict, which has sent oil and gas prices soaring after the effective closure of the strait of Hormuz, an important shipping route.As recently as last month, the Bank of England was forecasting CPI inflation to fall to the 2% target in the second quarter of the year, opening the way to more interest rate cuts.
However, at last week’s monetary policy committee meeting, rates were left on hold, and markets now expect the next move to be up,Announcing the unchanged 3% figure for February, the Office for National Statistics (ONS) said higher inflation for some products, including clothing, had been offset by declining prices elsewhere,Grant Fitzner, the ONS chief economist, said: “The largest upwards driver was the price of clothing, which rose this month but fell a year ago,“This was offset by falls in petrol costs, with prices collected before the start of the conflict in the Middle East and subsequent rise in crude oil prices,”Petrol prices have increased significantly since the war began, with the RAC saying at the end of last week that a litre of unleaded was up by 12p or 9%.
The ONS cited declining prices for alcoholic drinks and tobacco, which fell 0.1% on the month in February, as another downward pressure on inflation.February also brought another welcome moderation in annual food inflation, down from 3.6% in January to 3.3%, the lowest rate since March 2025.
However, experts have warned that the higher cost of fertiliser as a result of the supply blockages in the Gulf could lead to food costs rising again in the coming months.Karen Betts, the chief executive of the Food and Drink Federation, said: “While food inflation fell slightly in February 2026, I am concerned that this is the calm before the storm.“The longer the conflict in the Middle East goes on, the bigger its impact will be on food prices.With food and drink price inflation already running above historical averages, heightened energy, maritime fuel and fertiliser costs will put further pressure on prices.”The ONS said core inflation, which excludes volatile factors including food and fuel, was higher in February than a month earlier, at 3.
2%, up from 3.1% in January.That may underline fears among hawkish policymakers at the Bank of England that price rises could spread beyond the sectors affected by the Iran crisis into the wider economy.The Bank’s monetary policy committee next meets to set rates on 30 April.The chancellor, Rachel Reeves, said: “In an uncertain world we have the right economic plan … We’re taking £150 off energy bills and providing targeted support for those facing higher heating oil costs.
“We’re also acting to protect people from unfair price rises if they occur, bring down food prices at the till, and cut red tape.”Reeves told MPs on Tuesday she was reviewing the options for providing targeted support to households that could face significantly higher utility bills in the coming months as a result of the conflict, now in its fourth week.
UK politics: Reform UK suspends mayoral candidate after he described Jewish security group as ‘cosplayers’ – as it happened
Ben Quinn is a Guardian political correspondent.Reform UK has confirmed that that it has suspended Chris Parry as its Hampshire mayoral candidate after he described members of a Jewish neighbourhood watch group as “cosplayers” and likened them to “Islamists on horseback”. (See 1.53pm.)A Reform UK spokesperson said: “Chris Parry has been suspended by Reform UK pending investigation
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You have to feel a bit sorry for the chancellor. Roughly four weeks ago, Rachel Reeves had come to the Commons to deliver her spring statement. A moderately upbeat picture of the nation’s finances that didn’t necessarily coincide with people’s lived experience. Still, it more or less did the trick. Bought her another six months until the autumn budget
Labour lost white working-class voters to Greens in Gorton and Denton, party analysis finds
Labour lost significant numbers of white working-class voters to the Greens in Gorton and Denton, the party’s postmortem has concluded, after it came third in the Greater Manchester byelection last month.The Greens won the byelection, with Reform in second place.Labour’s deputy leader, Lucy Powell, told activists and members it was a warning the party could lose voters on its left flank who went far beyond the stereotype of progressive young professionals and those from Muslim communities.High numbers of voters broke for the Greens in the final hours before polling closed, the party’s analysis has found, with some conflicted until they reached the ballot box about which party was better placed to stop Reform.Powell was expected to present the findings to Labour’s national executive committee on Tuesday but told activists and members in a call over the weekend that people had repeatedly said they needed a “reason” to vote Labour
Reform UK suspends mayoral candidate over comments on Jewish group
Reform UK has suspended one of its key mayoral candidates after he described members of a Jewish neighbourhood watch group as “cosplayers” and likened them to “Islamists on horseback”.Chris Parry, who had remained the mayoral candidate for Hampshire despite a previous controversy in which he said David Lammy should “go home” to the Caribbean, made the latest comments on Monday about Shomrim, a volunteer group that safeguards communities including Orthodox Jewish families.The former rear admiral was condemned for comments made when he retweeted a post on X by Catherine Blaiklock, a co-founder of the Brexit party, hours after news emerged of an arson attack on ambulances run by a Jewish charity in London.“Can Christian’s [sic] in Britain set up their own police and patrol certain neighbourhoods?” said Blaiklock, who posted a picture of a number of Shomrim vehicles.Parry shared the post, adding: “Remember that these cosplayers have no more jurisdiction or legal authority than ordinary citizens
UK defence firms ‘bleeding cash’ as delayed spending plan leaves industry in ‘paralysis’
Defence manufacturers are going bust while others have been left in “paralysis” and “bleeding cash” as they wait for a long-delayed UK military spending plan for the next decade, MPs have heard.Industry groups said a more than six-month delay to the defence investment plan (DIP) had also left the UK behind Germany and the US in attracting cash from global investors.“The ecosystem is not in a great place, it’s what I would call paralysis,” said Samira Braund, the defence director of the ADS Group trade body, speaking to the defence select committee on Tuesday. “I don’t think that [the government] have put effective mitigation plans in place at all.”The DIP, originally expected last autumn, has been repeatedly postponed amid warnings that the military faces a £28bn funding gap over the next four years
Rachel Reeves rules out universal support on energy bills
Rachel Reeves has ruled out universal support to deal with any future rise in energy bills, saying any government help would be targeted, and criticised the support offered by Liz Truss’s government as unaffordable and irresponsible.The chancellor also said she would review the planned fuel duty rise in September, but did not commit to delaying or postponing it.She said contingency planning was taking place for an expected rise in energy bills but the focus was on longer-term measures to bring down bills for all, and targeted support for the poorest households.“The previous government pushed up borrowing, interest rates, inflation and mortgage costs with an unfunded, untargeted package of support under Liz Truss. That gave the support to the wealthiest of households,” Reeves said
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