Research from the Bank of England indicates that UK companies expect to increase their prices by 3.7% over the next year, a rise from 3.4% in February. This shift follows the onset of the Iran conflict, which has disrupted oil and gas supplies, leading to increased costs across various industries. The chancellor, Rachel Reeves, met with retail leaders to address potential supply shortages and rising prices, particularly concerning household energy bills. She faces pressure to provide targeted support for consumers rather than broad measures like those implemented previously during the energy crisis following Russia's invasion of Ukraine. As inflation expectations have risen from 3% to 3.5%, the Bank of England is closely monitoring these developments, with financial markets anticipating two interest rate hikes by the end of the year. However, Bank governor Andrew Bailey cautioned that weak consumer demand might limit companies' ability to pass on these cost increases.