ALEX BRUMMER: The high costs of conflict make it difficult to combat inflation

It can be no real surprise that the UK’s overall inflation rate is 6.7 percent.

Anyone who fills their vehicle with gasoline or diesel knows that fuel prices are rising again.

The initial upward pressure can be attributed to Saudi Arabia and Russia, which have restricted oil production in an attempt to boost returns.

There are growing concerns that the violence in Gaza could spill over into Israel’s northern border with Lebanon and Syria, drawing Iran more directly into the conflict.

That would make it harder to win the battle against inflation.

Tensions: There are growing concerns that the violence in Gaza could spill over to Israel’s northern border with Lebanon and Syria, drawing Iran more directly into the conflict

If Iranian exports are disrupted by a new round of Western sanctions, between one and two million barrels per day of supplies would be lost and prices could rise by $20 per barrel.

Crude oil prices rose as much as 2 percent in recent trading, after gaining 7.5 percent last week. After the Yom Kippur War in 1973, crude oil prices rose 300 percent.

Improved but still fragile relations between Israel and its Arab neighbors should help ensure nothing dramatic happens this time, despite anger on the Arab street over the misattributed Gaza hospital rocket tragedy.

For British households, a 45 percent increase in natural gas prices is just as relevant given falling temperatures.

British consumer prices remain below the Bank of England forecast. Still, the conflagration in the eastern Mediterranean raises questions about whether Rishi Sunak’s promise to halve inflation before the end of the year will be kept.

The government is being supported by the Ofgem price cap, which came into force on October 1 and is expected to reduce the consumer price index (CPI). The upward pressure on hotel prices will not help the fight.

UK Hospitality has warned the Chancellor ahead of next month’s Autumn Statement that its business rates bill could soar by £864 million if relief is not provided.

This would put businesses out of business and could result in higher costs being passed on to consumers.

As energy and hospitality disappear, the underlying inflation outlook improves, even though the UK has the most profound problem of the G7.

Food prices are finally moderating and costs in the service sector are falling.

The latest CPI data will be the last before the Bank of England’s rate-setting monetary policy committee meets on November 2.

Homeowners and borrowers will be praying that the bank, which narrowly voted to keep interest rates at 5.25 percent in September, shows restraint.

Raising interest rates does nothing to lower oil prices, it simply increases the likelihood of a slowdown or even a recession.

Nobody wants that.

Gas guzzler

“Just Stop Oil” has received free advertising and raised public sympathy for climate change.

But even as Britain makes progress towards becoming a greener nation, no one should think that fossil fuels are on their last legs.

Higher oil prices have already caused British oil majors BP and Shell to slow their focus on renewable energy.

Exxon is doubling down on natural gas with its £50 billion purchase of Permian Basin neighbor Pioneer.

The British company Centrica, the owner of British Gas, has already signed a long-term supply contract for liquefied natural gas (LNG) with Qatar.

The Netherlands is securing its energy future by signing a 27-year supply agreement with Qatar under which the Gulf state will supply 3.5 million tonnes of LNG annually.

At home, Energy Minister Claire Coutinho takes no prisoners.

It warns that unless new fields in the North Sea are exploited, oil and gas production will halve by the end of this decade, which would “subjugate Britain to foreign regimes”. Is Labor energy czar Ed Miliband listening?

Ives in March

Private equity’s assault on the cheaper end of the London Stock Exchange continues with Apax Partners acquiring technology consultancy Kin and Carta, the former St Ives printing firm, for £203m.

A weak pound and a “London discount” have made the city the bargain bin of the world. It is disappointing that boards of directors, who are supposed to protect the interests of all stakeholders, give in so easily when they hear the rustle of fresh banknotes.

What a shame that CEO John Kerr, a Deloitte graduate, didn’t show more backbone and defend a company with six decades of history.

Founder Robert Gavron, a former chairman of the Guardian, must be spinning in his grave.