See more Daily Mail on Google - save us as a Preferred SourceBy JAMES TAPSFIELD, UK POLITICAL EDITOR Published: 11:51 BST, 10 September 2026 | Updated: 11:52 BST, 10 September 2026
Brits could face a winter of discontent amid fears of a 'triple whammy' of rises to energy bills, interest rates and taxes.The economic mood looks to be darkening as the Iran war continues to heap costs on businesses around the world. Brent Crude topped $102 a barrel this morning, the highest level since mid-May, with no sign of the crucial Strait of Hormuz getting back to normal. Experts are now forecasting that the UK's energy price cap could rise by 18 per cent in January, to a three-year peak. The Bank of England has been hinting it might need to bump up interest rates to contain inflation pressures.Meanwhile, Andy Burnham and Chancellor John Healey have been refusing to rule out more tax hikes in the Budget next month, as they struggle to fund Labour's spending plans and service the Government debt mountain. Andy Burnham and Chancellor John Healey have been refusing to rule out more tax hikes in the Budget next month The Strait of Hormuz (file picture) is showing no sign of returning to normal any time soon Donald Trump has admitted that the Iran war will not be resolved before mid-term elections in the US this yearThe European Central Bank is widely expected to increase interest rates today, as policymakers react to the deteriorating situation.The UK's headline CPI inflation rate rose to 2.9 per cent in July, and hopes have been fading that it is heading back to the BoE's 2 per cent target. Speaking to MPs on Tuesday, Bank governor Andrew Bailey said inflation risks were 'to the upside'.He cautioned that energy prices 'could be higher still' as a result of the conflict.'The conflict is still going on and it is also causing a high level of energy prices and quite a bit of volatility in energy prices,' he said.But Mr Bailey stressed that market expectations of rates rises did not mean they would definitely happen.The Monetary Policy Committee (MPC) will meet next week to make its next decision on interest rates, although most analysts predict they will wait longer to see how the situation develops. In October the Ofgem price cap will increase by £60 to £1,723 for a typical household on a dual-fuel tariff.That is despite the Government temporarily removing VAT from electricity charges. The latest forecast from energy firm E.ON suggests the cap could rise again to £2,027 in January. Mr Burnham and Mr Healey have repeatedly dodged questions on whether taxes could go up again at the Budget.That is despite Labour already having pushed the burden towards an all-time high since taking power in 2024. In a newspaper article at the weekend, the PM vowed to keep the books balanced and talked up his push for public ownership of utilities – which could cost billions of pounds. Bank of England governor Andrew Bailey said this week that inflation risks were 'to the upside'Global anxiety over the effects of the Middle East crisis and concerns about the possibility of an AI 'correction' have wiped out much of Mr Healey's 'headroom' against the fiscal rules. There is also huge pressure for more spending in areas such as defence and to meet Mr Burnham's other promises.The original 'winter of discontent' happened under James Callaghan's Labour government at the end of the 1970s.Following a global energy prices shock, a wave of strikes demanding higher wages was exacerbated by extreme cold weather and storms - causing misery for the public.
