Rachel Reeves has said it is “certainly not good for the British economy to have trade disrupted” as a result of the Middle East crisis.
Appearing before Parliament’s Treasury Committee on Wednesday, the Chancellor said it would be “unwise to speculate” about the impact of the Iran conflict on inflation, growth or interest rates, but added that the Treasury is “looking at a number of scenarios”.
The war has restricted shipping through the Strait of Hormuz – a vital route for oil and gas supplies.
Ms Reeves told MPs: “It’s certainly not good for the British economy to have trade disrupted, and especially when so much oil and gas comes from that part of the world.
“But the best thing that we can do as a Government is to seek to de-escalate this conflict.”
She said “the quicker we can de-escalate, the better it will be for all of those different economic variables”.
G7 countries, whose finance and energy ministers have met in recent days, are mulling the release of strategic oil reserves.
“I’ve been very clear that the UK is willing to play its part in using those reserves to put downward pressure on oil prices and ensure that supply remains strong,” Ms Reeves said.
“We’re working closely with both our allies in the Gulf and in the G7 and also with the insurance industry to ensure that as quickly as possible we can get those movements going again.”
