LONDON — Emergency support to help Brits grappling with rising bills should go to “those who need it most,” Chancellor Rachel Reeves said Tuesday — all-but ruling out a Liz Truss-style universal bailout in response to the Iran war. Pledging to “learn the mistakes of the past,” Reeves told MPs Tuesday that, while “contingency planning” is underway for “every eventuality,” the government will be “responsible” with public finances in any new state intervention. Oil and gas prices have soared since the conflict began, leading to higher fuel prices in the U.K. and sparking fears of a sharp increase in family and business energy bills when a regulated price cap period ends in July. Reeves said that, while the full impact of the crisis is not yet known, “the challenges may be significant.” In response to the 2022 energy crisis sparked by Russia’s invasion of Ukraine, the government of then-Prime Minister Liz Truss subsidized the bill of every household in the country — a policy backed by the Labour Party at the time. But Reeves today criticized the “unfunded, untargeted” 2022 package, saying it had pushed up borrowing, interest rates and inflation. Between 2022 and 2024, households in the top income decile received an average £1,350 of direct energy bill support, Reeves said, contributing to national debt “still being paid today.” However, the chancellor stopped short of explicitly ruling out a similar approach. She said: “Contingency planning is taking place for every eventuality so that we can keep costs down for everyone and provide support for those who need it most, acting within our ironclad fiscal rules to keep inflation and interest rates as low as possible.” The government has already announced a £53 million package of support for households that use heating oil, which are not protected by the energy price cap. The majority of households that use gas and electricity will not see prices rise until July, when the next price cap period ends. The latest expert projections suggest the average annual bill could rise by more than £200 from current levels. On fuel pricing, Reeves said the government would give an update “within the next month,” amid pressure from opposition parties to extend a longstanding five pence tax relief on gasoline and diesel — the fuel duty cut — beyond its expiry date in September. U.K. gasoline prices have have risen by nearly 16 pence per liter since the war began, while diesel has risen by more than 31 pence.

BRUSSELS — The European Commission will make a proposal to boost the bloc’s carbon market reserve within “days” and develop a €30 billion decarbonization fund, in response to pressure from EU leaders to limit the CO2 price’s impact on electricity bills. Commission President Ursula von der Leyen said the EU executive would work on a mix of immediate relief and structural changes to bring down high energy prices, with measures to tackle all components of the power bill, from taxes and levies to carbon costs. Two measures to tweak the Emissions Trading System (ETS), which requires factories and power plants to purchase a permit for every ton of CO2 they emit, “will come in the next days,” von der Leyen said at a press conference following Thursday’s EU leaders’ summit. They include an update to the so-called benchmarks that determine how many free-of-charge permits a certain industrial sector receives and a proposal to “increase the firepower” of the Market Stability Reserve governing the ETS permit supply. In what she described as the “medium term,” von der Leyen pointed to the review of the ETS scheduled for this summer, as well as a new “ETS investment booster” providing financial support to industry. This booster, first reported by POLITICO on Thursday, will “have a budget of round about €30 billion, financed by 400 million ETS allowances,” she said. “The aim is to finance projects for decarbonization” under a first-come, first-served scheme with a focus on lower-income EU countries. In their summit conclusions, leaders asked the Commission to conduct the ETS review “by July 2026 at the latest, to reduce the volatility of the carbon price and mitigate its impact on electricity prices … while preserving the essential role of the ETS.” Compared to previous drafts, the final conclusions also “invited” the Commission “to work closely with Member States to design national temporary and targeted measures” to rein in high energy prices. This addition was seen as catering to countries such as Italy and Poland, which had cited their national circumstances — in particular, high reliance on fossil fuels in their power mix — as reasons for more substantial changes to the ETS, two diplomats said. Asked specifically about a controversial Italian decree subsidizing power companies to make up for their ETS costs, von der Leyen said: “Because of different energy mix in different member states you cannot have one-size-fits-all” and vowed to “work closely with the Italian government on the Italian decree.” In general, she said, Thursday’s summit was “positive for the ETS.” The bloc’s bedrock climate measure escaped demands for fundamental changes from leaders and was widely praised as a key lever for accelerating the bloc’s transition to cheaper clean energy.

President Donald Trump said Wednesday that the U.S. had no advance knowledge of an Israeli strike on a major Iranian natural gas field that prompted Iran to retaliate against neighboring Qatar and sent oil prices soaring. Even as he distanced the U.S. from the strike on the South Pars gas field, Trump vowed to “massively blow up the entirety of the field” if Iran attacked Qatar again. “The United States knew nothing about this particular attack, and the country of Qatar was in no way, shape, or form, involved with it, nor did it have any idea that it was going to happen,” he said in a social media post. The president’s response to the attack on the world’s largest gas field, which supplies the vast majority of Iran’s domestic energy demands, appeared to be an unusual acknowledgment of a breakdown in coordination between Israel and the U.S. in the war that the two countries launched with joint strikes on Feb. 28. Trump said Israel struck a “relatively small section” of the natural gas field. He said South Pars would not be targeted in the future unless Iran launches further attacks on Qatar, in which case he threatened to destroy the entire natural gas field. “NO MORE ATTACKS WILL BE MADE BY ISRAEL pertaining to this extremely important and valuable South Pars Field unless Iran unwisely decides to attack a very innocent, in this case, Qatar – In which instance the United States of America, with or without the help or consent of Israel, will massively blow up the entirety of the South Pars Gas Field at an amount of strength and power that Iran has never seen or witnessed before,” he said. Iran depends heavily on natural gas to produce electricity and heat throughout the country. The natural gas from South Pars fulfills 80 percent of Iran’s natural gas demands.

BRUSSELS — Anxiety is growing over Europe’s unusually low gas storage levels as the war in Iran threatens to spark a fight among countries over dwindling global energy supply. The EU requires member countries to maintain gas reserves at 90 percent of capacity by the winter — a measure brought in after Russia’s 2022 invasion of Ukraine. But this year’s colder-than-average winter depleted those reserves to under 30 percent as of March, the lowest since 2022. With gas prices soaring after Iranian attacks effectively closed the Strait of Hormuz — the narrow passage through which 20 percent of the world’s liquefied natural gas passes, of which 6 percent was bound for Europe —  the task of refilling those reserves by the winter carries a greater risk. Behind the scenes, government officials and industry lobbyists warn countries could rush to meet those targets all at once if the rules aren’t loosened, driving up demand and allowing traders to exploit soaring prices. That’s the dynamic that caused traders to bid up gas prices to over €300 per megawatt hour in 2022, with the lofty new storage targets compounding the sharp rise in demand that followed Russia’s supply cuts. Analysts say the difficulty in restocking those reserves will also be made more difficult by stiff competition from Asia, which is more directly exposed than Europe to the gas shipments that once flowed through the Persian Gulf. That could lead to higher mid-year gas prices, undercutting the incentive for traders to sell in the winter and store in the spring and summer. Officials stress it’s still early days. But already, multiple European governments have considered invoking existing carve-outs that allow them to relax storage targets in order to reduce the scope for bulk buying, according to three European energy officials familiar with the matter. Meanwhile, at least three countries believe the EU executive should introduce flexibilities beyond the existing framework, including lowering the target by as much as 30 percent, two of the officials said. The countries also sought a new EU mechanism to coordinate gas purchases, they added. Such policies would allow countries to fill up for the coming winter more comfortably. “With a lower target we would not be driving the demand for very high storage level filling, [and] driving the prices up,” said one of the people. The Commission hasn’t yet ruled on how best to respond, the people said. But it too has explicitly flagged the issue, both at a summit of energy ministers on Monday and previous gatherings of ambassadors and national energy experts over the past week, according to the people cited above and an EU official. A Commission spokesperson didn’t respond to a request for comment. In public, officials remain sanguine. For instance, Germany’s reserves are running at 22 percent capacity after Berlin pushed to lower its storage goals last year, but the country’s economy minister, Katherina Reiche, has downplayed the issue. Others are more nervous. “The status quo is unsustainable — existing mechanisms do not sufficiently ensure the security of gas supply because the incentives to fill gas storage facilities are inadequate,” Sebastian Heinermann, the managing director of German storage association INES, said in a statement Tuesday. Gas industry lobby group Eurogas has also warned that tough EU regulations governing cargoes of liquefied natural gas — which can be shipped to the highest bidder, as opposed to fixed supplies of pipeline gas — makes selling to Europe less appealing to many exporters. That further squeezes the EU’s chances of securing desperately needed fuel on an ever-tightening market.

BRUSSELS — The European Commission will look into loosening state aid rules and capping the price of gas to help member countries deal with the energy crisis triggered by the Iran war, according to a letter sent by Commission President Ursula von der Leyen. The letter, dated March 16 and obtained by POLITICO, singles out a number of main ways countries could combat higher energy costs, which have risen sharply as a result of the U.S.-Iraeli war with Iran. The letter comes ahead of a meeting of European leaders in Brussels on Thursday. Since the war broke out last month, effectively shutting off the Strait of Hormuz through which a fifth of the world’s oil supply transits, EU countries have been debating a broad range of responses to a looming energy crunch. Proposed measures have ranged from the modest and technical, such as relaxing rules to allow governments to compensate households and businesses for rising energy costs; to the radical and controversial, such as scrapping the EU’s most important climate laws. One option proposed in Monday’s letter is to relax state aid rules to permit national capitals to redistribute profits generated by gas-fired plants to support consumers and businesses facing rising bills, the letter says. Another potential change would allow countries to cap the price of gas.  Von der Leyen said both of these policies had been used after Russia’s invasion of Ukraine in 2022 and stressed that the Commission would determine on a case-by-case basis whether they would be deployed again. “The design of these emergency mechanisms should in any case avoid internal market distortions, preserve long-term investment signals for clean energy and preclude excessive additional demand for gas,” she said.  The Commission will also “further strengthen” a mechanism that allows countries to compensate 80 percent of the carbon price paid under the Emissions Trading System, the EU’s flagship carbon pricing mechanism, von der Leyen added.   The letter also stresses that measures ought to be “targeted and temporary” — an apparent rebuke to countries that have sought to dismantle key climate policies that they blame for higher prices.  The Commission president added that the Commission would also look into simplifying rules for companies to buy electricity through power purchase agreements. It will also propose a new law to “ensure that grid users receive the right incentives to make optimal use of existing grid infrastructure, as this will avoid unnecessary and costly grid expansions,” she said. 

BRUSSELS — The European Union won’t give in to pressure to re-engage with Russia to offset surging energy prices triggered by the war in Iran, the bloc’s energy chief told reporters on Monday. “We’ve decided in the European Union that we do not want to re-import Russian energy,” Dan Jørgensen, the EU commissioner for energy, said at the sidelines of a summit of energy ministers in Brussels. “It’s extremely important that we stick to this line — we cannot in Europe help indirectly finance Russia’s brutal, illegal war,” he said. The comments come as a growing chorus of EU leaders push for a rethink of the bloc’s relationship with Russia, which threatens to upend the implementation of the EU’s historic phase-out of Russian gas. The Commission is set to announce a similar ban on oil next month. “We’ve been far too long dependent on energy from Russia, making it possible for Putin to blackmail us with energy, making it possible for Putin to weaponize energy against us, and we are determined to stay on course with these issues,” Jørgensen added. “It would be a mistake for us to repeat what we did in the past. In the future, we will not import as much as one molecule from Russia.” Hungarian Prime Minister Viktor Orbán has been among the most vocal advocates for revived Russian trade, calling on the EU to suspend sanctions on Moscow last week. On Sunday, Belgian Prime Minister Bart de Wever said the EU ought to negotiate with Russia to eventually “regain access to cheap energy.” Russian President Vladimir Putin has also offered to resume gas trade with the bloc, and Washington has temporarily lifted its own sanctions on the country. Jørgensen also ruled out long-term, structural changes to EU energy policy to deal with soaring prices, including reforming the electricity market design, as POLITICO reported on Sunday. Commission President Urusula von der Leyen echoed the sentiment earlier this month, saying returning to Russian oil and gas would be a “strategic blunder.”

LONDON — Keir Starmer knows the war in Iran could sink his number one domestic mission: Cutting the cost of living.  But unfortunately for him, the man with most power to stop the conflict seems not to be in a hurry.  The U.K. prime minister was more explicit than ever on Wednesday that he wants to see “de-escalation” in the Middle East — in part because it’s the surest way of stopping energy bills skyrocketing in his own country.  Starmer said his government was “working around the clock” to ensure consumer and business costs don’t soar, after being challenged in the House of Commons over fears that disrupted oil and gas flows from the Gulf are spiking gasoline prices and could hike home energy bills, too. “The most important thing, the most effective thing we can do,” he told MPs, “is to work with our allies to find a way to de-escalate the situation” in the Middle East.  That might prove … tricky.  While Donald Trump faces his own domestic drama over high prices at the pump, the White House is showing no signs of seeking an immediate resolution to the conflict.   The Trump administration believes it can withstand a spike in oil prices for as many as four weeks before the political pain starts to bite, POLITICO has reported. That timeframe — should it be borne out — is laden with risk of further escalation in the region, and carries major domestic political risk for Starmer, over an issue that remains the public’s number one priority.  BALANCING ACT “While the public are deeply concerned about events in the Middle East and implications for international security, those concerns are dwarfed by worries about the cost of living,” said pollster Luke Tryl, director of the More in Common think tank.  “The prime minister has so far managed to stay on the right side of public opinion on the war, with the median Brit supporting Starmer’s position of allowing the use of U.K. bases purely for defensive strikes,” Tryl added. “However, the balancing act between maintaining a good relationship with the United States and being able to show he is doing everything he can to stop the war leading to another spike in the cost of living is a tricky one.”  The Trump administration believes it can withstand a spike in oil prices for as many as four weeks before the political pain starts to bite, POLITICO has reported. | Celal Gunes/Anadolu via Getty Images There’s also a Catch-22. Efforts by Starmer and other European leaders to mitigate the war’s impact on the global economy might help persuade Trump he need not hurry U.S. withdrawal from the Gulf.  America’s allies confirmed Wednesday they would coordinate — via the International Energy Agency (IEA)— release of a record 400 million barrels of oil from their strategic reserves. Even before it was confirmed, expectation of this move helped temper oil price rises.   The next big decision could center on the Strait of Hormuz, a key trade route largely closed to oil and gas shipping since the crisis began.  While welcoming agreement on the release of strategic reserves, IEA Executive Director Fatih Birol said: “The most important thing for a return to stable flows of oil and gas is the resumption of transit” through the Strait.  Starmer’s Chancellor Rachel Reeves told MPs on Wednesday the “root cause” of the U.K.’s cost-of-living concerns “is the challenge in getting oil and gas out of the Middle East.” The government would “work flat-out” to de-escalate the conflict and “get vessels moving again in the Strait of Hormuz,” she said.  Precisely what that means in practice — or whether the U.K. or other American allies could police Hormuz without getting involved in U.S. and Israeli offensive operations against Iran — is unclear.  Foreign Secretary Yvette Cooper spoke to U.S. Secretary of State Marco Rubio Monday, according to U.K. officials, who said they discussed their “desire to see a swift resolution that supports stability in the Middle East and protects the global economy.”  MOMENT OF MAXIMUM DANGER So far, U.K. household energy bills — significantly influenced by wholesale gas prices — have been spared the price spike, which has been driven by both the effective closure of the Strait and by Iranian attacks on energy production in Gulf countries. The most notable attack was against QatarEnergy, a major liquefied natural gas exporter, which has suspended production. U.K. gas and electricity costs are determined using a regulated price updated every three months, and prices until June are already locked in.  But the longer the war goes on, the bigger the impact will be when the price cap is set for July to September — and beyond.  Reeves told MPs on Wednesday it is “much too early, less than two weeks into the conflict, to have any certainty about what things will look like when the next energy price cap is determined, at the end of May, for July.”  But for a government that has promised to cut energy bills £300 by 2030, the longer the war, the bleaker that moment in May could be.  Foreign Secretary Yvette Cooper spoke to U.S. Secretary of State Marco Rubio Monday, according to U.K. officials, who said they discussed their “desire to see a swift resolution that supports stability in the Middle East and protects the global economy.” | Justin Tallis/AFP via Getty images Hence Starmer’s increasingly urgent focus on somehow persuading the U.S. and Israel to draw back. That task won’t be made any easier by deteriorating relations with Trump, who last week, in a row over U.S. access to U.K. military bases, dismissed Starmer as “not Winston Churchill.”  “The most important issue is de-escalating the situation,” Starmer told MPs Wednesday, reiterating that the U.K. “should not join the war in Iran” and would only carry out defensive military operations in the region to “protect British lives and the British national interest.”  For the prime minister — hanging onto office by a thread even before the conflict — it could yet prove be existential.  “For all the support for Starmer in navigating the conflict so far,” said Tryl, “if people start to feel the impact in their pockets and bills, the demand for change which has already tanked his poll ratings will likely only grow.”  Additional reporting by Esther Webber.

ROME — U.S. President Donald Trump’s airstrikes on Iran are creating a problem for his ally Italian Prime Minister Giorgia Meloni ahead of a high-stakes referendum on March 22-23, which polls suggest she risks losing. While the nationwide referendum is ostensibly about judicial reform, it has rapidly snowballed into a broader vote of confidence in Meloni and her right-wing government, Italy’s most stable in years. Meloni’s close alliance with Trump now threatens her political fortunes as he is highly unpopular in Italy, with 77 percent of people holding an “unfavorable” view of him according to the pollster Yougov. The war is also exacerbating widespread fears about an energy price shock — a major factor in a country that already pays some of the EU’s highest power prices. That hostility toward the U.S. president, as well as fears over the impact of the war on household bills, means Meloni is now treading a tightrope, avoiding criticizing her powerful ally in the White House while reassuring voters that Rome will not be dragged into the war. In a political compromise, Meloni on Thursday pledged air-defense support to Gulf states hit by retaliatory fire from Iran, and her defense minister said Italy would send “naval assets” to protect Cyprus. She is simultaneously insisting, however, that Italy will not give direct support to the U.S.-Israeli war against Tehran, and notes that U.S. bases in Italy are authorized only to offer logistical support, not to conduct offensive operations. “We’re not at war; we don’t want to go to war,” she told RTL radio on Thursday. This balancing act over Iran could hardly come at a worse time for Meloni. Polls now suggest the referendum is too close to call, and that much will depend on the turnout. Should she lose, it would be a major set-back for a politician who has enjoyed an air of invincibility at home and on the EU stage in recent years. The Italian leader has invested heavily in her relationship with Trump, hoping to position herself as a kind of European “Trump whisperer” capable of maintaining influence in Washington. But that strategy is now beginning to carry political costs at home, with Italy’s marginal role in U.S. strategic decision-making laid bare by the stranding of her Defense Minister Guido Crosetto in Dubai last week, as the strikes unfolded without prior warning. Crosetto himself later conceded the powerlessness of America’s European allies in a parliamentary debate. He admitted the attack on Iran had “certainly occurred outside the rules of international law” but added no government — European or otherwise — could have prevented the strikes. The potential use of U.S. military bases in Italy also risks becoming politically explosive in a country where the public has historically been wary of being drawn into U.S.-led conflicts. The government insisted that the use of bases such as Naval Air Station Sigonella in Sicily is limited to logistical and technical support covered by long-standing bilateral agreements. Using Italian soil to provide support for strikes would require the government’s permission, which has not been requested, Meloni said in her comments to RTL on Thursday. In a political compromise, Giorgia Meloni on Thursday pledged air-defense support to Gulf states hit by retaliatory fire from Iran. | Antonio Masiello/Getty Images Foreign Minister Antonio Tajani told parliament that the government’s actions were meant to protect Italian citizens in the region as well as shipping lanes, and to prevent a spike in energy prices. “We are not just addressing Trump’s positions; the safety of our fellow citizens is the priority.” Conscious of the danger posed by soaring energy prices, Meloni on Tuesday summoned energy leaders to her office for ministerial talks on energy security. She told Italian radio that her government was “working incessantly” on stemming price rises in food and energy. Sensing her political vulnerability, however, opposition parties have criticized her for refusing to condemn the strikes and over her subservience to the U.S. During the debate in the parliament, Angelo Bonelli of the Green and Left Alliance accused the government of  being subservient to Trump. “You are leading Italy into war, minister. Do you know why? Because when a military aircraft arrives, be it a cargo plane or something else, and goes to perform maintenance or something else, those planes will then go bomb, they will go into the theater of war, they will provide military logistical support,” he said. “What’s the difference between military logistical support and someone who goes bombing? It means being at war, and we don’t agree. No, thank you!” Arnaldo Lomuti, a lawmaker from the populist 5Star Movement, quipped that Rome should distance itself from Washington and Israel, requesting that the government “impose sanctions against the United States, and present a military aid package for Iran.” Analyst Leo Goretti of the Istituto d’Affari Internazionali said Meloni “is keeping a low profile, well aware that public opinion is overwhelmingly against Italian involvement in the war, while needing not to damage relations with Trump.” Jacopo Barigazzi contributed to this report.

LONDON — Days into the U.S. war with Iran, the U.K. government is retooling to cope with a crisis that is already squeezing British defense capabilities and driving up energy prices. Teams of officials are being redeployed around Whitehall, including at the Ministry of Defence, Foreign, Commonwealth and Development Office (FCDO) and departments covering energy, transport and trade, in order to cope with fresh demands. Two people working in the civil service, granted anonymity because they like others in this piece were not authorized to speak publicly, said reassignments had been made on a three-to-four-month basis. A third person said internal government assessments are not necessarily that specific — but that they expect to be dealing with the war on Iran and its fallout “for the long haul.”  The government’s central assumption is that the direct, kinetic phase of the conflict will last weeks but its tail could be much longer. While the U.K. is straining to keep out of the conflict — granting only limited use of its military bases to the U.S. — ministers accept there will be a huge knock-on effect from the Middle East crisis. That includes on hot-button cost-of-living issues that are central to embattled Prime Minister Keir Starmer’s chances of political survival. MILITARY RESPONSE The Ministry of Defence is focused on the immediate task of trying to protect U.K. military assets and personnel, while the government’s other top concerns were highlighted Wednesday by Chancellor Rachel Reeves’ audience with oil and gas sector representatives and Treasury Minister Lucy Rigby’s meeting with insurers. “I don’t think anyone’s expecting this thing to be over quickly,” said one British diplomat.  The U.K. has been preparing for potential U.S. strikes on Iran since the beginning of the year, according to four officials, including by surging fighter planes to the region. The MoD moved to a higher level of force protection — measures designed to safeguard military personnel and facilities — in response to mass unrest in Iran and the U.S. bolstering its presence in the Gulf.  Treasury Minister James Murray alluded publicly to these operations, telling Times Radio: “I’m not going to get into exactly the details of what happened. But what I’m clear about is the defensive capability that we’ve been building up in recent weeks.” Nevertheless, two government officials said the eventual action by the U.S. and Israel was beyond what they had expected, as was Iran’s response — which they described as “haphazard.” The U.K. had some foresight of the U.S. intention to move, said one of these officials, but they had far less indication of where Iranian retaliation would fall, which partly explained the apparent slowness of British warship HMS Dragon and helicopters going to the aid of the U.K.’s Royal Air Force base on Cyprus. Jacob Parakilas, research leader at the RAND Europe think tank, said: “RAF Akrotiri was certainly a conceivable target in the event of hostilities but it’s neither the easiest nor the most significant target for Iran.” A Western official said the decision to send the warship to the Mediterranean only landed on U.K. Chief of Defence Staff Rich Knighton’s desk at 9.30 a.m. on Tuesday, and was approved soon afterwards. The MoD is one of the ministries which has redeployed staff internally to work on Iran, with high priority attached to ensuring that the U.K.’s changing posture does not damage existing NATO commitments or sap energy from efforts to support Ukraine. Starmer has already sought to link the Middle East conflict to the war in Ukraine, saying Ukrainian experts will help shoot down Iranian drones, and his government is expected to call on industry to help meet the need for stronger air and missile defenses. Parakilas predicted the conflict would not require a massive outlay of further British defense capabilities, since the U.K.’s naval base in Bahrain is heavily defended and can meet the threat of occasional attacks by Shahed-style drones.  But, he warned: “That should not be cause for complacency.” In this instance, Parakilas said, the U.K. and most of its facilities are at the edge of Iran’s reach — “but that will not necessarily be the case in future conflicts.” TERROR RISK Elsewhere, the Home Office and security services are monitoring for a heightened risk of domestic threats. On Monday the National Cyber Security Centre — part of the GCHQ digital intelligence agency — issued a fresh alert in response to the situation in the Middle East, calling on organizations to review their cybersecurity. It noted that although it views there to be “no current significant change” in the direct cyber threat from Iran to the U.K. this may change due to the “fast-evolving nature of the conflict.” The FCDO is meanwhile leading repatriation efforts described as “unprecedented,” by Foreign Secretary Yvette Cooper with hundreds of thousands of Britons currently stranded in the Gulf. Above all, civil servants are scrambling to deal with potential implications for the energy sector and international trade — two areas that risk upending the unpopular Starmer government’s bid to slash the cost of living. Households could see more than £500 added to their energy bills this summer if hostilities continue, the Resolution Foundation think tank calculated earlier this week. Keir Starmer Starmer told MPs that “the question of energy supply right now is a serious one.” | Wiktor Szymanowicz/Future Publishing via Getty Images Starmer told MPs at prime minister’s questions Wednesday that “the question of energy supply right now is a serious one” and “we are doing all we can, with allies, to make sure that it is preserved. It is vital that we keep trade flowing through the Strait of Hormuz.” The U.K. is currently considering options for protecting commercial ships in the Strait of Hormuz, including sending naval escorts, according to Western officials.  Energy Secretary Ed Miliband has held talks with representatives from Qatar and Saudi Arabia, as well as energy giants BP and Shell about global energy markets in recent days. A third government official said the hope is that consumers are protected for a while because Britain’s energy price cap — a limit on the amount suppliers can charge for each unit of gas and electricity — is locked in for the next three months. But they acknowledged there would be pressure to replicate several support schemes drawn up after Russia’s invasion of Ukraine, even as they cautioned that the need for such a move is a long way off. Treasury Minister Lucy Rigby met insurance firm Lloyds of London Wednesday to discuss how the sector is being affected. A fourth Whitehall official said that while commercial insurance remains available, additional premiums may be needed for vessels transiting these areas. A jump in energy prices could, in turn, hold back the Bank of England from continuing on its path to reducing interest rates, economists have warned – something that would represent a significant blow to Reeves and the government’s wider battle with inflation. The National Institute of Economic and Social Research think tank has carried out analysis which finds that if the shock to energy prices is more than just temporary, the U.K.’s central bank may have to go in the other direction — raising the all-important Bank Rate from its current 3.75 percent rate to back above 4 percent. “The Bank of England will have to contend with a shock to global energy prices, with the question of persistence hanging over their heads. This will cause problems for Rachel Reeves as financing costs increase, putting further pressure on an already precarious fiscal outlook,”  said the NIESR’s Ed Cornforth. Mason Boycott-Owen and Charlie Cooper contributed reporting.