Since the US-Israeli strikes on Iran began nearly two months ago, global energy markets have been volatile. But the shock facing Britain has so far been smaller than that which followed Russia’s invasion of Ukraine: UK gas prices peaked at 78p per therm above pre-war levels – not 300p, as in 2022. Even so, a return to recent peaks would hit family finances hard: British households’ energy and fuel spending this year would be £11 billion higher than if prices had stayed at early-2026 levels. In light of ongoing uncertainty over developments in the Middle East, this edition of the MPO unpacks the potential impact of the shock on the UK economy, and discusses how the Bank of England and Government should respond.