Rural UK ‘particularly at risk’ of diesel shortages if Iran war continues
Summary
The Organisation for Economic Co-operation and Development (OECD) warns that ongoing conflict in Iran could cause diesel shortages in rural UK areas. The group also predicts slower UK economic growth next year and higher inflation through 2026, affected by energy and fertilizer costs linked to the conflict.Key Facts
- The OECD expects UK economic growth of 0.9% in 2024, up slightly from 0.7% in March.
- Growth forecast for 2025 was lowered from 1.3% to 1.1%.
- Diesel shortages could happen especially in rural areas if the Iran conflict cuts fuel supply.
- Low jet fuel stocks risk hurting trade sectors like pharmaceuticals and tourism.
- UK Chancellor Rachel Reeves has acted to help rural consumers facing high heating oil prices.
- Fertilizer prices are rising due to the conflict, leading to higher food prices in the UK.
- Inflation is expected to average 3.7% in 2026, peaking in Q3, then falling to 2.4% but staying above target.
- The Bank of England may reduce interest rates slightly in 2026, as it expects the energy price shock to ease.
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