How the Iran war affects your money and bills

An important development from the financial markets: How the Iran war affects your money and bills 2 days ago Share Save Add as preferred on Google Kevin Peachey Cost of living correspondent Getty Images From petrol prices to mortgage rates, the US-Israel war with Iran has already had an impact on people's finances in the UK. One think tank has estimated the average working-age British household could be hundreds of pounds worse off this year as a result of the conflict. Here are some of the areas to watch out for.

Fuel prices for motorists Drivers have noticed that prices at the pump have jumped since the war began, but have since dipped from their peak. Crude oil is a key ingredient in petrol and diesel, meaning higher wholesale costs make filling up a car more expensive. Analysts say every $10 (£7.

Economic Details

53) increase in the wholesale oil price pushes up pump prices by roughly 7p a litre. Since the war began, that wholesale price has been volatile as the production and transportation of energy across the Middle East has slowed or stopped entirely due to missile strikes and drone attacks. Figures from the RAC motoring group show average petrol and diesel prices started falling on 16 April after 46 days of increases – the longest run of consecutive rises on record.

The price of petrol peaked at 158. 3p a litre and diesel reached 191. 5p a litre, the RAC said.

The latest data shows petrol was marginally under 157p, and diesel 188. 5p, with the RAC expecting further falls. It means that the average cost filling a 55-litre family car with petrol has increased by £14 since the start of the Iran conflict, with diesel up by £27.

Analyst Views

Because transporting oil is a slow process, price movements in the wholesale markets take about a fortnight to show at the pump. Fuel retailers have denied accusations of price gouging during the conflict and the regulator has said there is no evidence of widespread attempts of profiteering . While motoring organisations say that there are plenty of supplies, they are encouraging people to reduce non-essential journeys.

They also suggest people amend their driving style, by not accelerating or braking too hard to conserve fuel. Not everyone has a car or may not use one for a daily commute. However, when petrol rises, it can carry through to higher prices for goods and services.

For example, if transport costs for supermarkets increase that could then be reflected in the cost of food. Cost and choice of mortgages Before the war began, there had been a hope and expectation of a steady fall in the interest rates charged on new, fixed mortgages, as well as lower variable rates. However, the opposite has happened.

Financial markets are tracking the development closely as investors assess the likely impact.