Keir Starmer postpones planned 5p increase in fuel duty
Car changing is a big deal
Prime Minister Keir Starmer has announced that the planned 5p increase in fuel duty will be postponed, extending the freeze until the end of the year.
Prime Minister Keir Starmer has announced that the fuel duty freeze has been extended “for the rest of the year”.
Starmer said the government had extended the freeze due to ongoing conflicts in the Middle East, which have pushed up prices at the pump.
Carwow has approached the Treasury for comment.
Fuel duty on petrol and diesel had been scheduled to rise this September. The proposed increase would be phased in: 1p in September, 2p in December, and a further 2p in March 2027.
However, political pressure has mounted against the proposal, with several parties criticising it on the grounds that it would hit households already struggling with high bills.
The decision follows reports that average petrol prices reached their highest level since the start of the Iran conflict on Monday, at 158.52p per litre, according to the RAC.
Earlier this week, The Sun reported that chancellor of the exchequer Rachel Reeves was expected to announce plans to scrap the planned 5p increase in fuel duty entirely.
The issue is also linked to broader economic concerns, including cost of living pressures discussed in and around the Autumn Budget.
Reeves has previously said she would do “everything in my power” to protect families from economic shocks, as ministers continue to monitor inflation, which some analysts have forecast could reach as high as 6.2%.
Economists have warned that global instability could push up prices further and slow growth in the months ahead. UK economic output rose by 0.3% in March, slightly ahead of expectations, but analysts say that momentum could weaken if energy and transport costs rise.
A fuel duty increase, they argue, would risk adding further upward pressure on inflation, which the Bank of England targets at 2%.
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