Homepage Accessibility links Skip to content Accessibility Help BBC Account Notifications More menu Search BBC Close menu english navigation How the cost of holidays, food and clothes is rising - despite the Iran ceasefire Animations on Animations off By Jemma Crew and the Visual Journalism team 9 April 2026 News Petrol and diesel costs have soared since the US and Israel launched wide-ranging strikes on Iran and there are warnings food, holidays and even clothes could also get more expensive. News of a two-week ceasefire has brought some welcome relief - but there is huge uncertainty about what could happen next, and fears long-lasting economic damage has already been set in motion. That means your expenses are likely to rise in the coming months. Here’s what you need to know.
Europe usually gets about half of its jet fuel from the Gulf and fears of shortages have pushed up prices steeply. Last week it hit an all-time high of $1,838 (£1,387) per tonne, compared with $831 before the war began. Many Asian airlines, and others globally, have responded by cutting flights and raising fares. For example, Air New Zealand's cancellations are expected to hit routes in and out of Auckland, Wellington and Christchurch, while US airline Delta will target red-eye and mid-week flights, and Air France-KLM will raise fares for long-haul journeys. Some, such as British Airways owner IAG, have so far been able to hold off on changes because they are buying fuel at a price fixed before the war. Air passengers are being warned further ticket hikes and cancellations are likely. Greater demand for destinations perceived as safe, such as Portugal and the Caribbean, could also push up prices for these locations.
Prices of oil and gas around the world have risen dramatically and people in the UK who rely on heating oil are already experiencing a spike in prices. Thousands of homes in Britain have been protected by the energy regulator’s price cap - but that will be reset in July. It is expected to rise considerably, which will mean higher bills (although we usually use less energy in the summer). Cornwall Insight’s latest forecast predicts the bill for households using a typical amount of gas and electricity will rise by £288 a year - or 18% - compared with the April price cap. The government has promised targeted help based on household income if bills do go up sharply but it may not come until autumn.
Rising energy prices usually show up first at the pump - and that’s what’s been happening in the UK where petrol and diesel rose by a record monthly amount in March. The average price of petrol is up 25p a litre since the start of the war, while diesel has risen by 48p. Both are at their most expensive level in over three years. Across the world, governments have begun introducing measures to limit the impact on consumers and the economy, such as fuel rationing or encouraging people to work from home. The UK government has described Britain's fuel supplies as "resilient”. The RAC says the outlook remains “highly uncertain”. The best hope for drivers is that pump prices stop rising at the rate they have been, and they shouldn’t expect significantly cheaper fuel in the short term, it says. However, some smaller independent forecourts, which buy fuel as it costs on the day rather than in advance at a set price, may be quicker to pass on reductions.
When petrol and diesel get more expensive, the cost of transporting goods goes up. Diesel also powers some farm machinery, while crop growers use energy to warm their greenhouses. And fertiliser prices have risen as supplies of key ingredients made in the Middle East have been disrupted. Inflation - the rate at which prices rise - for farm running costs is more than 7% higher this March, compared with last March, according to data from independent consultants the Andersons Centre. All these extra costs are expected to feed through into higher prices in supermarkets and other shops. The UK food industry expects prices to rise by an average of at least 9% by the end of the year - three times its forecast before the war. But that is based on a swift end to the war and most key oil, gas and fertiliser sites returning to normal within a year. This means if you were to buy a litre of milk for £1 today, it is expected to cost about £1.09 by December.
Most clothes in the UK are made abroad, with the majority coming from Asian countries including China and Bangladesh. Major manufacturers in Bangladesh, Vietnam and the Philippines are seeing energy costs spike, while higher oil prices will also increase transport costs. The price of polyester, a petroleum-based fibre, has also risen by about 25% since before the war. If these costs are passed on to customers, then clothes in the shops could become more expensive. UK clothing retailer Next expects to face £15m in additional costs - which it has offset through savings elsewhere - if the war lasts for three months, but says further extra costs would be passed on to customers through higher prices. Mountain Warehouse also expects to pass on extra costs to customers if there is sustained disruption.
By-products from petrochemicals are used to produce drugs including painkillers, antibiotics and vaccines. The UK imports most of its generic medicines, with 30% coming from India, which in turn depends on the Gulf to supply a significant proportion of its crude oil imports. The UK was experiencing some product shortages before the war, and recently NHS leaders and pharmacies raised concerns about supplies and prices. Last week the government said it wasn’t aware of any supply issues caused by the conflict. The National Pharmacy Association says the war has pushed up the cost of transporting and manufacturing some medicines. Some pharmacies say they’ve increased the cost to customers of common generic over-the-counter medicines, such as paracetamol and hay fever treatments, by about a fifth. The NPA says some wholesale prices for pharmacies ordering in stock have almost doubled since the start of the war, and it anticipates more of these extra costs will be passed on to patients in the coming weeks. There won’t be a change to how much people pay for their prescriptions, it says, as these prices are fixed by the NHS.
When prices rise too fast, the Bank of England usually raises interest rates to try to reduce demand. If rates rise, borrowing money from commercial lenders - whether on credit cards or for a mortgage - is also likely to get more expensive. The Bank's base rate is currently set at 3.75%, with the next decision due on 30 April. Hundreds of mortgage deals have been pulled in the last month and remaining deals have become more expensive as lenders prepare for this. It means people hoping to get on the housing ladder, and those whose fixed terms are coming to an end, now face higher costs and fewer options. The average rate on a two-year deal was 4.83% at the start of March, but is now 5.90% - the highest since July 2024, according to the financial information service Moneyfacts. But it could mean savers get a slightly better return, as a higher base rate could mean an increase in interest offered by banks and building societies on savings accounts.
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