On 21 April 2026, Chancellor of the Exchequer Rachel Reeves delivered an oral statement to the House of Commons updating Parliament on the UK’s economic response to the ongoing conflict in the Middle East. The statement followed the Spring Meetings of the International Monetary Fund in Washington, where Reeves engaged with global finance ministers on coordinated action to address economic risks stemming from the war. She emphasized that while the UK did not initiate or join the conflict, it has a duty to respond responsibly in the national interest through diplomatic and economic measures.
Reeves outlined that the government’s approach centers on negotiation, de-escalation and the permanent reopening of the Strait of Hormuz as critical to global energy and food security. She confirmed that last week in Washington, she held talks with US Treasury Secretary Scott Bessent and other major economies, resulting in a joint agreement with ten other nations to avoid unnecessary trade restrictions and maintain maximum economic pressure on Russia to prevent it from profiting from the war. The UK also announced its third tranche of Extraordinary Revenue Acceleration funding for Ukraine’s defences and continues to work with the US administration to increase economic pressure on Iran.
The Prime Minister has led global efforts to support freedom of navigation through the Strait of Hormuz, convening a summit with the President of France. Reeves stated that the UK will continue to play its part, including engagement with the insurance industry to support shipping when conditions allow. She reiterated that the best economic policy today is diplomatic policy, stressing that negotiation and de-escalation remain central to the UK’s strategy.
On domestic economic indicators, Reeves reported that inflation remains stable at 3%, with expectations to fall towards target levels. GDP growth increased to 0.5% in the recent three-month period, and borrowing is projected to decline across the current parliamentary period. These figures reflect a strengthened fiscal position compared to previous global shocks, she said, noting that the government’s cost-of-living measures—including extended fuel duty reductions, frozen prescription charges, and support for energy bills—are helping to reduce financial pressure on households and businesses during this period of uncertainty.
Regarding energy security, the Chancellor confirmed plans to manage existing North Sea oil and gas fields throughout their lifetimes, including allowing tiebacks to extend production, to maximise domestic supply. The government is also accelerating renewable energy projects and expanding infrastructure to support clean energy adoption, including improving grid capacity. Changes to the electricity market include extending the Electricity Generator Levy beyond 2028 and increasing its rate to 55%, a reform aimed at reducing the impact of gas prices on electricity costs and generating additional revenue for government support measures.
Reeves concluded by stating, “This Government has the right economic plan. A plan to keep costs down for everyone and support those who need it most.” The update underscores the UK’s commitment to combining international cooperation with domestic policy to manage inflation, protect households, and strengthen resilience against global economic shocks.