Rachel Reeves makes huge announcement as inflation set to rise

Rachel Reeves spoke to the Commons on Monday (Image: Getty)

Rachel Reeves has issued a dire warning that the conflict with Iran is "likely to put upward pressure on inflation", in another blow for the economy. The Chancellor told the Commons that she's ready "to support a co-ordinated release" of international oil reserves to ease the crisis. Despite this, she claimed the British economy is strong enough to withstand shocks.

Ms Reeves told MPs: "I am clear-eyed about my response to the current situation. My economic approach will both be responsive to a changing world and responsible in the national interest. The economic impact of the situation in the Middle East will depend, of course, on its severity and its duration. The movements that we have already seen are likely to put upward pressure on inflation in the coming months.

The Chancellor met virtually with other G7 finance ministers. (Image: Getty)

She also called for action to "guarantee the security of vessels passing through the Strait of Hormuz" - one of the world's most vital choke points, through which a fifth of the world's oil supplies pass.

The Chancellor met the finance ministers of other G7 nations on Monday to discuss the possibility of such a release, but the meeting concluded without agreement on any concrete action.