Average UK Petrol Price Hits 150p for First Time Since 2024; Trump’s Latest Iran Extension Fails to Calm Oil Market – Business Live

Why It Matters

Higher fuel and borrowing costs squeeze household budgets and could curb consumer spending, while rising yields and equity declines signal tighter monetary policy across Europe.

Key Takeaways

• UK petrol hits £1.50 ($1.88) per litre.
• Diesel averages £1.78 ($2.22) per litre.
• Mortgage rates rise to 5.75% highest since 2024.
• Brent crude climbs above $110, pressuring equities.
• European bond yields surge, signaling inflation risk.

Pulse Analysis

The latest spike in UK pump prices reflects a confluence of supply‑side shocks and geopolitical risk. Since the Iran‑Israel escalation, crude oil has surged past $110 a barrel, pushing the average petrol price to roughly £1.50 per litre – a level not seen since mid‑2024. For motorists, the cost increase translates into an extra £0.16‑£0.18 per kilometre, prompting a shift toward price‑comparison apps and a potential reduction in discretionary road trips, especially over the upcoming Easter weekend.

Beyond the forecourt, the ripple effects are evident in the credit markets. UK mortgage benchmarks have climbed to 5.75% for a two‑year fix, the steepest rate in 19 months, while Moneyfacts notes a £132‑per‑month uplift in monthly repayments for a typical £250,000 loan. Simultaneously, sovereign yields across Europe have risen, with the UK 10‑year gilt at 5.05% and German bunds approaching 2.8%. These moves tighten financing conditions, elevate inflation expectations, and pressure equity valuations, as reflected in the Stoxx 600’s recent 0.66% dip.

The backdrop remains the volatile Middle‑East theatre and the United States’ diplomatic posturing. Donald Trump’s recent ten‑day extension of the Iran deadline failed to calm markets, leaving Brent above $110 and reinforcing the view that oil will stay a price‑setter for global growth. Analysts warn that sustained oil prices above $100 a barrel could embed higher input costs across manufacturing and logistics, further feeding inflationary pressures. Until a diplomatic de‑escalation materialises, policymakers and investors must brace for continued cost‑of‑living pressures and a cautious outlook for both consumer spending and capital markets.