Britain must prepare for a renewed surge in prices as the conflict involving Iran disrupts global energy markets and threatens to trigger a fresh wave of inflation, economists and policy analysts have warned.

The escalation of military confrontation in the Middle East has shaken global commodity markets, particularly after disruptions to shipping through the Strait of Hormuz, one of the world’s most critical energy corridors.

Roughly a fifth of the world’s oil and significant volumes of natural gas normally pass through the narrow waterway, making it a central artery for global energy supply.

Since hostilities intensified, oil and gas prices have climbed sharply as markets reacted to fears of prolonged disruption.

Brent crude has risen significantly while European gas prices have surged, reflecting uncertainty over supply from Gulf producers and wider geopolitical instability.

The price increases are already feeding through to wholesale energy markets in Britain.

The United Kingdom is especially exposed to such shocks because it imports a large share of its energy and relies heavily on natural gas to generate electricity and heat homes.

When gas prices rise, they ripple through the entire power market because gas-fired generation frequently determines the wholesale price of electricity.

Economists warn that the consequences could soon reach British households.

If elevated energy prices persist, the next update to the national energy price cap later this year could push bills higher again after a brief period of expected relief.

Some forecasts suggest that sustained increases in oil and gas prices could add hundreds of pounds to annual household energy costs.

Higher energy costs would not only affect heating and electricity bills.

Transport fuel, manufacturing inputs and fertiliser prices are also closely tied to global energy markets, meaning that rising costs could spread across the wider economy and increase the price of food and everyday goods.

The pressure would fall most heavily on lower-income households, which spend a larger share of their budgets on energy.

Analysts warn that a fresh price shock could erode expected gains in living standards that many families had anticipated following a period of stabilising inflation and rising wages.

The conflict’s economic impact extends beyond energy bills.

Rising costs for fertiliser and agricultural inputs could place additional strain on the farming sector, potentially feeding through to higher food prices in the coming year.

Businesses facing higher energy and transportation costs may also pass those expenses on to consumers.

The situation has revived debate over Britain’s long-term energy security and the vulnerability created by reliance on global fossil fuel markets.

Some analysts argue that accelerating investment in domestic low-carbon energy sources such as wind, solar and nuclear power could reduce exposure to geopolitical shocks.

For now, policymakers face the challenge of navigating a volatile global environment in which geopolitical conflict can rapidly ripple through energy markets and household finances.

With the Iran conflict continuing to disrupt supply routes and drive market uncertainty, economists say Britain should be prepared for the possibility of another sudden surge in living costs.