UK households face £2,400 hit from Iran war
Archived — this story has rotated out of today’s deck. It is kept here in full.
The gist
CEBR analysis says UK households face £2,400 average financial hit from Iran war by 2027. The squeeze persists until energy markets calm, affecting household budgets and Treasury finances.
Background
The Iran war, which began on 28 February, has driven up inflation and weakened wage growth, leading to a significant financial impact on UK households. The Centre for Economics and Business Research (CEBR) calculated that the average household will lose £1,100 in real income in 2026 and a further £1,300 in 2027, totaling £2,400. Additionally, the conflict has raised energy costs, with Ofgem raising the energy price cap by 4% from October to December, and the Energy and Climate Intelligence Unit estimating an extra £9.8bn in UK energy and road transport costs.
How it unfolded
- Feb 28, 2026US-Iran war begins, leading to higher wholesale oil and gas prices.
- Aug 26, 2026Ofgem announces a 4% increase in the energy price cap from October to December due to higher gas prices from the war.
- Aug 31, 2026CEBR analysis published, estimating a £2,400 average financial hit to UK households by 2027.
Who’s saying what
- Analysts
- CEBR warns that the squeeze will persist until energy markets calm, affecting household finances.
- Official
- Ofgem raised the energy price cap by 4% from October to December, citing higher wholesale gas prices.