Senior executives from major UK banks have been called to an urgent meeting with Chancellor Rachel Reeves to assess the potential impact of escalating tensions involving Iran on the British economy.

The discussions come amid growing concern over how instability in the Middle East could affect global markets, energy supplies, and domestic economic conditions.

The meeting is expected to focus on risks to financial stability, including volatility in oil prices, pressure on inflation, and potential disruptions to international trade routes.

The Strait of Hormuz, a critical artery for global energy shipments, has emerged as a key area of concern, with any sustained disruption likely to have ripple effects across economies.

Bank leaders are understood to be providing assessments of market resilience and the readiness of financial institutions to respond to external shocks.

This includes evaluating liquidity conditions, credit exposure, and contingency planning in the event of prolonged instability.

The Treasury is seeking to coordinate closely with the financial sector to ensure that appropriate safeguards are in place.

Officials are particularly focused on mitigating risks to households and businesses, which could face higher costs and economic uncertainty if tensions escalate further.

The situation highlights the interconnected nature of global economic systems, where geopolitical developments can quickly influence domestic conditions.

By convening leading figures from the banking industry, the government aims to maintain a proactive approach to managing potential challenges.

Further updates are expected following the meeting, as policymakers and financial institutions continue to monitor developments and prepare for a range of possible scenarios.