Iran War Shock: UK Energy Cap to £1,850, Unemployment Hits 5%

The Iran-war oil shock pressed into UK household bills and the labour market in the same picture on Tuesday, while the country's slow-moving criminal-justice machinery posted procedural milestones on Grenfell and former DUP leader Sir Jeffrey Donaldson.

Cornwall Insight forecast that the Ofgem quarterly energy price cap will rise to GBP 1,850 a year from July, a 12.7 per cent increase from the GBP 1,641 cap for April-June, adding GBP 209 to a typical household bill. The main driver is wholesale gas, which roughly doubled in price after Iran closed the Strait of Hormuz in response to the US-Israeli strikes earlier this year. Markets pulled back from a March peak that would have implied a GBP 2,000 cap, but Cornwall warned that the October cap is unlikely to fall back to April levels even in the event of a ceasefire, citing "physical damage to infrastructure" and persistently disrupted supply. Cornwall's Craig Lowrey said the only durable answer was renewable capacity -- "the only real path to bills that aren't as exposed to events thousands of miles away." Chancellor Rachel Reeves is expected to set out a cost-of-living package on Thursday including the cancellation of the 1p September fuel-duty rise and probably the 5p increase scheduled to follow over six months.

The labour market hit the headline number markets had been bracing for. The Office for National Statistics said the unemployment rate unexpectedly rose to 5 per cent in the three months to March, up from 4.9 per cent, with vacancies dropping to their lowest level in five years. Payrolls fell by 100,000 in April -- the largest single-month drop since May 2020 -- driven by pullbacks in retail and hospitality. Regular earnings growth slowed to 3.4 per cent, leaving real wages just 0.3 percentage points above CPI inflation. The print marks the first hard data point on Iran-war uncertainty showing up in hiring decisions.

The Metropolitan Police said on Tuesday that it will submit evidence files to the Crown Prosecution Service by the end of September 2026, seeking charges against up to 57 individuals and 20 companies over the 2017 Grenfell Tower fire. Potential offences include corporate gross negligence manslaughter, fraud, health and safety breaches and misconduct in public office. The CPS will need until June 2027 to decide on charges, and the police indicated any trials are unlikely to begin before 2029, meaning the criminal phase will run a full decade past the fire.

A pre-trial hearing at Newry Crown Court the same day cleared the procedural path for the trial of former Democratic Unionist Party leader Sir Jeffrey Donaldson and his wife Lady Eleanor Donaldson. Sir Jeffrey faces 18 charges including one count of rape; Lady Donaldson faces five charges of aiding and abetting. Both deny all allegations. The court was told a medical report on Lady Donaldson is now complete, with a further hearing on Wednesday before jury selection on 26 May.

Around those leads, four further national stories anchored the day. Transport Secretary Heidi Alexander confirmed in parliament that HS2 will now cost up to GBP 102.7 billion, with services running between 2036 and 2039 -- as much as six years late -- and a reduced 320 km/h top speed to save further cost. Israeli forces detained British student leader Hasnain Jafer of King's College London with around 300 other activists from the Global Sumud Flotilla in international waters. The Prime Minister's spokesperson described BBC Panorama allegations that two women had been raped during the filming of Married at First Sight UK as "extremely serious," with a third now potentially involved. European jet-fuel supply fears -- which had pushed prices up 84 per cent since February -- have eased as alternative sources cover the gap from the Hormuz blockade, easing the threat to airlines' summer schedules.