LONDON (AP) — The escalating Middle East conflict is disrupting economic projections that British Treasury chief Rachel Reeves plans to present on Tuesday, as petroleum costs climb and financial markets decline.
Reeves initially anticipated her address to Parliament would be a modest presentation, featuring economic data that generally indicated positive trends.
But financial experts caution that the Middle East crisis may derail her Spring Statement predictions, potentially slowing economic expansion, fueling price increases, and raising government borrowing costs. Most notably, Brent crude oil prices have jumped more than 15% this week, climbing above $80 per barrel — a level that would likely drive up energy costs and inflation while limiting economic growth if it continues.
“With the world plunged into fresh uncertainty, she is likely to strike a highly cautious tone, focusing on maintaining stability and sticking to fiscal rules amid heightened tensions,” said Susannah Streeter, chief investment strategist at Wealth Club, an investment service.
Before her parliamentary address, Treasury officials indicated Reeves will emphasize the need for economic steadiness during these turbulent global times.
Looking back at government policies, Reeves plans to highlight declining inflation rates and interest rate reductions that are helping to reduce financial burdens on British families.
“This government has the right economic plan for our country, in a world that has become yet more uncertain,” she is expected to tell lawmakers.
The Labour administration, which has seen its popularity decline since winning the 2024 general election, had been counting on 2026 to demonstrate that Britain’s economy was becoming more stable than it had been in recent years.
Recent economic data has suggested growth momentum in early 2026. Inflation is projected to drop significantly in upcoming months, which could prompt the Bank of England to reduce interest rates further. The central bank maintained its primary rate at 3.75% last month.
