Oil hits $100 amid Middle East tensions, threatening Burnham's cost of living agenda
Brent crude oil prices surged past $100 per barrel following Houthi attacks on two Saudi Arabian tankers, reigniting Middle East tensions and undermining UK Prime Minister Andy Burnham's cost of living initiatives. The attacks, carried out by the Iran-backed Yemeni militia, prompted US President Donald Trump to threaten Iran with 'major military punishment' and US forces struck maritime targets overnight. The price spike mirrors levels seen in March after US-Israel strikes on Iran, and reverses gains from a June ceasefire. European natural gas futures jumped to €62/MWh, and UK gilt yields rose as markets priced in nearly three interest rate hikes over two years. Burnham's early policies—stripping VAT from energy bills, cutting business rates for pubs, and capping bus fares at £2—face funding questions, with economists warning that household costs depend heavily on Middle East developments. Former PM Keir Starmer had urged Burnham to prioritize diplomacy on international affairs.
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