How will war in the Middle East affect your finances?

How much more will it cost to fill up my car?

“Average petrol and diesel prices have rocketed in the last week and are unfortunately likely to keep on rising, so the situation for UK drivers is looking increasingly bleak,” said Simon Williams, the head of policy at the RAC.

Speaking on Monday morning, he said petrol had risen by 5p to 137.5p, and diesel by 9p to 151p a litre since the current crisis began on 28 February.

“Unleaded is almost certainly going to reach an average of 140p in the next week or so, while diesel looks highly likely to climb to at least 160p a litre,” said Williams.

If oil stays at around the $100 mark, petrol could rise towards 150p a litre, while diesel could hit almost 180p, which would be a three-year high, according to the RAC.

Petrol and diesel prices can vary hugely at forecourts, and it’s more vital than ever to shop around. Use apps and websites such as PetrolPrices and myRAC to see where fuel is cheapest in your area.

Will it affect interest rates and my mortgage?

It’s starting to already. Borrowers have benefited from cheaper home loans in recent months, and earlier this year many economists had been anticipating two cuts to interest rates in 2026 after the four announced by the Bank of England last year. But that’s all been upended by the war.

One expert said the jump in the oil price could add half a percentage point to UK inflation within the next three months – which may in turn force the Bank of England to increase interest rates.

The next Bank of England interest rate announcement is on 19 March. Most experts currently expect the base rate to be held at 3.75% then, but on Monday morning the money markets were indicating borrowing costs were more likely to rise than fall this year.

Several major mortgage lenders including HSBC , Nationwide Halifax and Barclays have taken action and increased rates on fixed-rate mortgages. Halifax and Barclays’ changes will come into effect on Tuesday.

So far, the increases have not been huge – typically up to 0.2 or 0.25 percentage points – but there may be worse to come, as the pricing of fixed-rate mortgage deals is largely dictated by money market swap rates. These jumped on Monday morning.

“We’re likely to see another wave of lenders withdrawing or repricing deals over the coming days, including some who only increased rates last week,” said Nicholas Mendes at the mortgage broker John Charcol.

Looking ahead to the next week or so, he said “much will depend on whether markets settle or if volatility continues”.

Most experts say that if you are on the hunt for a mortgage, it is worth locking into a new deal as soon as possible.

What about my energy bill?

Analysts had expected domestic energy costs to remain stable for the rest of the year, but now the expectation is that bills will go up.

Last Wednesday, analysts at Cornwall Insight said their forecast for the July to September price cap had increased to £1,801 a year. That was up £160 – 10% – on the April cap.

In the wake of the fresh turmoil in the energy markets experts and consumers will be watching closely to see if this forecast is updated. A lot depends on what happens over the coming days, and whether governments intervene.

What if I have stock market investments?

Here the advice continues to be: don’t panic.

At the time of writing – Monday lunchtime – the UK’s FTSE 100 share index was down by about 6.7% from where it was on 27 February, a few hours before the war began.

Many people who have been anxiously logging on to their investment apps and accounts will have been confronted by red numbers and graphs pointing downwards. (Unless you happen to have your money in oil companies such as Shell and BP, or the likes of weapons manufacturer BAE Systems, all of which were – perhaps not surprisingly – up on Monday.)

However, unless you need to sell your shares or fund holdings, at which point you “crystallise” the loss, you will not have lost any money. If you can stay put until prices recover, you will be back where you were or, hopefully, in an even better place.

Jemma Slingo at the investment firm Fidelity International said that staying invested throughout times of volatility was the best strategy. “When markets hit rocky waters, jumping in and out should be avoided, otherwise you run the risk of missing out on unexpected opportunities that might arise from market corrections.”

This was a good time to check you have a broad range of investments, she said.

Even if you don’t own any shares or funds, you may be affected by what is happening with stock markets. Workplace pension schemes and personal pension plans invest in the stock markets, alongside other assets such as property and bonds.

Younger people’s pension cash will often be put into “riskier” investments, partly because they have a longer time to retirement. As you get closer to retirement age, your scheme will usually start moving you into less risky assets, such as cash and bonds.

For pensioners using pension drawdown (a way to take money from a defined contribution pension), this is not a good time to sell investments to produce an income.

Will I be better or worse off by the end of this year?

Rachel Reeves, in a speech last week, said people in Britain would be “£1,000 a year better off” by the next election, based on their average disposable income, than in the final year of Conservative rule.

Unfortunately, much of the maths underpinning calculations that point to better times ahead will not hold if the war runs on.

Higher energy prices hit UK consumers most immediately through petrol pump prices, which have gone up significantly.

In the longer term, high energy bills, and the rising cost of fertiliser could pass through into higher food prices.