UK Households Face £480 Income Loss Amid Energy Surge

British households are bracing for a financial squeeze as surging energy prices triggered by the recent Middle East conflict erode living standards, with the average working-age family facing a real-terms income loss of around 480 pounds this financial year, according to a report from the Resolution Foundation think tank.

The analysis, released on Monday, projects that median household incomes will decline by 0.6 percent over the year, reversing an earlier forecast of 0.9 percent growth. This shift stems from a sharp rise in global oil and gas prices following the conflict, which involved military actions by the United States and Israel against Iran and led to the temporary closure of the Strait of Hormuz. Although a ceasefire was announced last week, market forecasts indicate energy costs will remain elevated. Petrol prices have climbed to about 1.50 pounds per litre for unleaded fuel and 1.80 pounds for diesel, while oil trades near 100 dollars per barrel. Industry experts at Cornwall Insight predict the Ofgem energy price cap will increase to 1,929 pounds annually from July, up from the current 1,641 pounds.

The impact varies by income level. For the poorest fifth of...