What should Rachel Reeves do now?

War in the Middle East is already pushing oil prices higher, and that means inflation pressure in the UK will rise again.

But this is not normal inflation. It is not caused by excessive demand in the UK economy. It is an external supply shock.

So the real question is simple: will the government protect households, or leave them to absorb the shock?

In this video, I explain why raising interest rates will not solve an oil shock, and why the government should instead:

• Cut VAT
• Cut fuel duty
• Stabilise long-term interest rates
• Protect household incomes

If ministers talk about economic defence in wartime, then protecting society must come first.