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The longer the war in the Middle East continues, the more likely it is there will be economic damage in the UK, Sir Keir Starmer has warned.

The Prime Minister insisted the economy was resilient and well placed to absorb the “likely impact” on households and businesses.

He acknowledged people’s concerns about the threat of rising bills in the wake of the US-Israeli assault on Iran and Tehran’s reprisals against countries across the region.

Oil prices have soared above 100 dollars a barrel for the first time since 2022 in response to the crisis.

London’s FTSE 100 Index fell nearly 2% soon after opening as the Middle East conflict caused an acute supply crunch.

At a community centre in London, Sir Keir said: “People will sense, you will sense I think, that the longer this goes on, the more likely the potential for an impact on our economy, impact into the lives and households of everybody and every business.

“And our job is to get ahead of that, to look around the corner, assess the risk, monitor the risks, and work with others in relation to that.”

US President Donald Trump sought to play down the impact of the turmoil he has unleashed, insisting the prices will “drop rapidly when the destruction of the Iran nuclear threat is over” and were a “very small price to pay”.

“ONLY FOOLS WOULD THINK DIFFERENTLY,” he asserted in a post on his Truth Social platform.