Chancellor Rachel Reeves is poised to abandon plans to hike fuel duty in September as petrol prices surge amid Middle East tensions. with Brent Crude nearing $110 per barrel and the Strait of Hormuz effectively shut, drivers face rising costs.. The RAC reports petrol at 158.24p and diesel at 186.15p, with further increases expected.

The $110 Barrel and Strait of Hormuz Shutdown

Brent Crude has surged to around $110 per barrel after Donald Trump renewed threats against Iran, exacerbating Middle East tensions. The Strait of Hormuz, a critical chokepoint for global oil supplies, remains effectively shut, disrupting energy flows. According to the report, this geopolitical instability has directly contributed to rising fuel prices in the UK.

Reeves' Fuel Duty U-Turn and Cost of Living Pressures

Chancellor Rachel Reeves is expected to announce as soon as Thursday that the planned September fuel duty increase will not proeed. The Treasury has not denied an imminent announcement, citing the need to keep costs down for motorists. The Prime Minister's spokesman emphasized that the government is determined to mitigate the impact of the Middle East crisis on fuel prices, having already extended a 5p fuel duty cut twice.

As the report says, Reeves faces mounting pressure to address the cost of living crisis, with the IMF warning of an inflation spike despite upgrading the UK's economic forecasts. The Chancellor was in Paris for G7 meetings, where she was pictured standing at a distance from US Treasury Secretary Scott Bessent, with whom she had a recent confrontation.

Labour's Internal Struggles and By-Election Battle

Amid the fuel duty debate, Labour is grappling with internal divisions. Andy Burnham's allies have accused rivals of sabotage after leadership contender Wes Streeting voiced support for rejoining the EU, highlighting Burnham's own views on Brexit.. The report notes that this infighting could jeopardize Labour's chances in the upcoming Makerfield by-election, where Reform UK is seen as a formidable opponent.

Deputy PM David Lammy acknowledged the 'internecine warfare' within Labour, warning that it could lead to a general election if the party does not unite. Meanwhile, Sir Keir Starmer visited Labour HQ to thank staff and pledged support for the by-election candidate, despite the internal strife.

Unanswered Questions and Economic Outlook

The report leaves several questions unanswered. Will Reeves' fuel duty decision be enough to offset rising petrol prices? How will Labour's internal divisions affect its electoral prospects? And what impact will the IMF's inflation warning have on the UK economy? The report does not provide clear answers to these questions,leaving readers to speculate about the future.