UK ministers begin contingency planning amid fears for economic effects of Iran war

The Guardian - World NewsCenter-LeftEN 5 min read 100% complete by Rowena Mason, Heather Stewart, Gwyn Topham and Jessica ElgotMarch 20, 2026 at 08:25 PM

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UK ministers are developing contingency plans due to concerns about the economic impact of the escalating conflict between the US and Iran. The government fears rising energy prices and borrowing costs, potentially necessitating measures like lowered speed limits and, as a last resort, energy bill bailouts. Tensions are heightened by President Trump's criticism of NATO allies, including the UK, for not intervening in the Strait of Hormuz. The UK has authorized its military bases to strike Iranian missile launchers targeting commercial ships in the Strait of Hormuz. The Treasury has established an "Iran board" to address the crisis, as the potential energy shock threatens to derail the government's economic recovery narrative ahead of local elections. Rising government borrowing costs and predicted interest rate hikes further compound the economic challenges.

Key Entities & Roles

Key Player Opposition Context

Cornwall Insight 30% Keir Starmer 40% United States 40% International Energy Agency (IEA) 40% Treasury 50% Rachel Reeves ×260% NATO ×260% Strait of Hormuz ×370% Donald Trump ×280% Iran ×380% UK ×590%

Keywords

iran war 90% economic effects 80% energy prices 70% contingency planning 70% uk economy 60% strait of hormuz 60% borrowing costs 50% energy bills 50% cost of living 50% fuel consumption 40%