Energy bills, fuel, mortgages, food: What the US-Iran ceasefire means for you
Markets have recovered since Donald Trump announced two-week truce with Tehran, but how might your energy, mortgages, fuel and food bills be affected?
The US and Iran have agreed a ceasefire deal after a conflict that has had implications on markets and economies far beyond the Middle East.
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Donald Trump confirmed on Tuesday that he had reached an agreement for a two-week truce, with the American defence secretary Pete Hegseth having declared “v for victory”.
Beyond the claims of victory, the ceasefire has already had huge impacts worldwide and fuelled hopes that sky high diesel and petrol prices might now come down.
Here is how the ceasefire is affecting everything from interest rates to food prices.
What does the US-Iran ceasefire mean for you?
Energy bills
Despite the ceasefire, there have been warnings that gas and electricity prices might rise.
Dr Craig Lowrey, principal consultant at the respected Cornwall Insight, told the Independent that there might be higher bills this summer.
“A ceasefire can ease some of the immediate pressure on gas markets, and that could take the edge off price cap forecasts for July, but it does not wipe the slate clean,” he said.
This is because pricing regulator Ofgem will set its next cap for the July period based on rates that were seen between February and May.
The most recent cap was set for April to June at £1,641 based on intel in February.
Interest rates and mortgages
Interest rates predictions fell in the UK on Wednesday, after the ceasefire, having risen on Tuesday when Mr Trump said “whole civilisation will die” unless Tehran complied.
Global stock markets have been recovering after the US and Iran agreed to the ceasefire and Moneyfacts said that calming markets should have a stabilising impact on the mortgage market.
The average five-year fixed-rate homeowner mortgage has risen from 4.95% at the start of March to 5.78% – the highest since November 2023.
Adam French, head of consumer finance at Moneyfacts, said: “Markets have reacted to easing tensions by pushing down expectations for future interest rate rises.”
Pensions
Many workplace and private pensions are invested in shares that will have been influenced by unrest in the Middle East, which has led to a rocky stock market situation.
Global stock markets moved in the direction of recovery on Wednesday after the ceasefire deal was recognised, with London’s FTSE 100 up 2.6% at the start of trading.
However, it might take a period for the unrest to even out, according to Tom Selby of AJ Bell.
He told the Mirror: “If you are planning to buy an annuity then that’s all well and good, but if you no longer intend to do so – and most people today choose the flexibility of drawdown when they access their pension – you could be sitting on a substantial fall in the value of your investments.
“For anyone in this position, the options are to either sit tight and hope the value of your investments recovers or shift your portfolio so your investments match your retirement intentions and accept that you might need to wait a bit longer to access your pension (or take a slightly lower income).”
Fuel
Motorists have been paying the highest amount since 2022 for petrol and diesel since the Middle East conflict ignited.
As of this week, the price of diesel has surpassed 190p a litre, while petrol was priced at 151.7p, up 19% since the escalation of the conflict.
While there are hopes that the prices might now have peaked, it could be a while until British consumers see pre-conflict prices at the pumps.
RAC head of policy Simon Williams told the Sun: “The conditional ceasefire announcement may have taken some heat out of global oil prices, but the outlook for drivers in the UK remains highly uncertain.”
Food prices
The blockage of the Strait of Hormuz has seen a decline in fertiliser shipments, which has thus stopped the growth of food.
Dr Liliana Danila, of the Food and Drink Federation, told the BBC that it could take six months to a year before the situation evens out.
"This means manufacturers will continue to feel the impact of supply chain disruptions for oil, gas, fertiliser, packaging materials and essential cleaning chemicals, keeping costs under strain for months to come,” she said.