If Rachel Reeves is to have any chance of making it to her autumn budget without U-turns or raising taxes, the improved economic forecasts of recent months need to come true. Missiles flying between Israel and Iran may destroy that hope.

Things had been getting better for the Chancellor. Look at economic forecasts from the aftermath of Trump’s ‘liberation day’, and there was a common theme when it came to Britain. Because of the nature of our economic relationship with America – as a massive exporter in services (we’re their call centre) and with more or less balanced trade in goods – we would be shielded against the worst impacts of a trade slowdown. Global GDP growth would suffer, but the effects would not come to Britain.

The real boon, if one was being positive, though was what effect these tariffs might have on inflation. While raising prices in the shops for American consumers, the view of the economic world was that for the UK they may in fact be disinflationary. That’s because, as the consultancy firm Oxford Economics explained to their clients last month, dampening demand for commodities such as oil and gas would reduce the cost of products consumed in Britain.

But all that was before the first Israeli missiles landed in Iran. A barrel of Brent crude now goes for over $70. On Monday it went for $65 – so there has been a 9 per cent in just five days. On Friday morning, it briefly spiked to nearly $80 in what was the sharpest price spike since Russia invaded Ukraine three years ago.

Within hours of Reeves delivering what director of the Institute for Fiscal Studies Paul Johnson yesterday called an ‘incomprehensible’ spending review speech, economists were warning that tax rises in the autumn were becoming likely. Just a day later, a worse-than-expected GDP contraction turned likely into very likely. If oil prices continue climbing as the war escalates, tax rises could become certain.

Some 20 billion barrels of oil pass through the Strait of Hormuz, or about 30 per cent of total global trade. So it’s easy to see how if Tehran tried to attempt to close the Strait – as Iranian news reports it is considering – or even attacked a few tankers, the oil price would quickly head northwards again. Indeed the FT reported yesterday that the world’s largest oil tanker company has stopped accepting new contracts to sail through the Strait.

If oil prices do continue to rise – and some say disruption in the Strait could send the price over $100 a barrel – it would be mere days before Brits start paying the cost at the petrol forecourt. But oil supplies are crucial to much more than petrol and diesel and taken together, it’s easy to see how the rate of inflation remains sticky or even begins to rise again.

Given that the bond markets are keeping the cost of UK debt far higher than the Treasury has been used to – much more because of inflation worries and the after effects of money printing than is understood in Westminster – any signal that prices were rising again are not going to give them faith in Britain as a debtor. If that were to happen and gilt yields remain high, or even climb further, then Reeves could find herself in heaps of trouble.

It surprises many City economists just how unequivocal the government has been about sticking to fiscal rules and indeed keeping Labour’s manifesto promise not to ‘raise taxes on working people’ given how hard that is when Reeves only has £9.9 billion of headroom. Before her Spring Statement the chancellor talked of the economic challenges posed by a ‘changing world’. Things in the middle east have a habit of spilling over and the world seems to be changing again. Could this once more be the excuse the chancellor has to reach for?