How the Iran war affects your money and bills

Here is a story making headlines in the economy: How the Iran war affects your money and bills2 hours ago Share Save Add as preferred on GoogleKevin PeacheyCost of living correspondentGetty ImagesFrom petrol prices to mortgage rates, the US-Israel war with Iran has already had an impact on people's finances in the UK. Hopes of a lasting deal to end the war have risen, but the political situation can change quickly as too can the effect on personal budgets. Here are some of the areas to watch out for.

Fuel prices for motoristsDrivers 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. Since the war began, that wholesale price has been volatile as the production and transportation of energy across the Middle East has been disrupted.

Economic Details

According to the RAC, the price of petrol reached an Iran war peak of 159. 53p a litre on 28 May, while diesel's highest price was 191. 54p a litre on 15 April.

The latest data shows petrol was marginally under 157p a litre, and diesel just under 178p, with the RAC expecting further falls. 22 to fill up a 55-litre family car with diesel – £18. 91 more than it did on 28 February, and £85.

74 for a tank of petrol – £12. 68 more than at the start of the conflict. Transporting oil is a slow process, so price movements in the wholesale markets take about a fortnight to show at the pump.

Analyst Views

It also means that, were the Strait of Hormuz to reopen, it will take some time for oil - and economic activity - to flow freely again. 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. Higher petrol prices can also carry through to increased prices for goods and services.

For example, if transport costs for supermarkets rise that could then be reflected in the cost of food. Cost and choice of mortgagesBefore 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 situation has proved to be much more volatile.

Lenders raised rates quickly, due to their own funding costs rising and an expectation that the base borrowing rate would not fall as previously anticipated. The average two-year fixed rate jumped from 4. 83% at the start of March to a peak of 5.

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