Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Chancellor Rachel Reeves has dubbed the US-Israeli war in Iran “a folly” in the strongest criticism yet by a senior British minister of Donald Trump’s military onslaught and the economic damage it has caused.
Reeves said she was “very frustrated and angry” with Trump over the war, which has wreaked havoc with her attempts to restore stability to the economy in 2026.
Her comments came as the IMF cut Britain’s growth prospects for 2026 by more than any other G7 nation.
In her Spring Statement on March 3, Reeves claimed that inflation was on course to fall to the Bank of England’s 2 per cent target by the middle of the year, with interest rates also on a downward trajectory. But the Iran war has upended those hopes.
“This is a war that we did not start,” Reeves told the Daily Mirror. “It was a war that we did not want. I feel very frustrated and angry that the US went into this war without a clear exit plan, without a clear idea of what they were trying to achieve.
“To start a conflict without being clear what the objectives are and not being clear about how you are going to get out of it, I do think that is a folly and it is one that is affecting families here in the UK but also families in the US and around the world.”
Reeves was more aggressive in her criticism of the conflict than Sir Keir Starmer, who has tended to use more subtle language to express his reservations. In March, the prime minister told MPs: “President Trump has expressed his disagreement with our decision not to get involved in the initial strikes, but it is my duty to judge what is in Britain’s national interest.”
However, earlier this month Starmer blamed the US president for higher energy costs resulting from the Iran war, saying: “I’m fed up with the fact that families across the country see their bills go up and down . . . because of the actions of [Vladimir] Putin or Trump.”
Reeves’ comments came as Starmer convened the first meeting of the ministerial Middle East Response Committee to deal with the impact of the war, which began at the end of February.
Downing Street said the committee would oversee the international and domestic response to the war to ensure the government is “best equipped to protect the UK public and our interests abroad”.
The body will meet regularly and consider efforts to reopen the Strait of Hormuz alongside the government’s economic response to the crisis, including future support for households and business.
Starmer and Reeves have said they want to stand by vulnerable families and the Treasury has drawn up contingency plans to help them with their domestic energy bills. Plans to increase fuel duty in September are “under review”, Starmer said on Monday.
The Paris-based OECD said last month that it expected UK inflation would accelerate to 4 per cent this year because of higher energy prices, the second-highest rate in the G7.
Credit: Source link
