Merryn Talks Money Exclusive: Rachel Reeves on Iran Shock, US Trade and Inflation Risks
Mar 3, 2026
Stephanie Flanders, Bloomberg’s Head of Economics who led the in-person interview. Rachel Reeves, UK Chancellor responsible for economic and fiscal policy. They discuss Britain’s pending US trade talks and how they relate to decisions on Iran. Conversation covers inflation risks, public finances and plans to boost wages, innovation and productivity.
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Energy Price Moves Can Undo Forecast Gains
- John Stepek notes the OBR's forecasts assumed Brent at ~$63 and gas at 64p/therm but prices have jumped to ~$83 and £1.50, risking higher inflation and slower rate cuts.
- Rising energy costs would erode fiscal headroom and worsen growth outlook.
North Sea Output Small But Strategically Important
- Rachel Reeves says North Sea oil is <1% of global supply but still crucial for UK jobs and investment.
- She will meet producers to assess production plans and scenario-based price outlooks to inform government response.
Short Term Protections Locked In Despite Market Shocks
- Reeves insists budget measures (rail fare freeze, prescription freeze, £150 off energy bills) will take effect and protect households for the next three months.
- She highlights OBR and Bank of England forecasts showing inflation and rates falling faster than previously expected, improving fiscal headroom.