The UK government faces limited capacity to shield households from escalating energy prices due to its mounting public debt, OBR economist David Miles warned. Recent oil and gas price surges driven by the Iran conflict represent "unambiguously bad" news for a major energy importer like Britain, though public pressure for intervention would be understandable.

Public sector net debt jumped to 85% of GDP during the first Covid year, from 76% previously, and now stands at 91% with forecasts indicating it will exceed 95% by parliament's end. The previous Conservative government spent £35bn cushioning energy costs in 2022-23 without effectively targeting those most in need for lack of accurate data.

Chancellor Rachel Reeves pledged to reduce cost of living pressures and protect families from international turbulence, while the OBR noted Britain's safety buffer against her fiscal rule increased to £23.6bn. However, the economy could face a "very significant" hit from the Iran conflict, potentially derailing stability promises.