Prime Minister Christopher Luxon and Finance Minister Nicola Willis will discuss the economic fallout from the war in Iran this afternoon. They will address the media at the Prime Minister’s post-Cabinet press conference at 4pm. A livestream of the press conference will play at the top of this story. Luxon’s response to the war comes as he struggles to reset his leadership after last week’s horror poll, which had National on 28.4%. Speaking to Newstalk ZB’s Mike Hosking Breakfast, Luxon said he has “absolutely not” been considering his future over the weekend. The cost of a barrel of Brent crude oil, a key benchmark, surged to $US110 ($185) today, a price hike that will increase costs to motorists and add to cost pressures across the economy. Oil is now nearly 50% more expensive than it was before the United States and Israel began attacking Iran on February 28. Economists have weighed in, warning the war will weigh on the economic recovery. BNZ head of research Stephen Toplis lifted his forecast for inflation and described the economic scenario as “the worst of all worlds for the average New Zealander”. “It’s very disconcerting when you find yourselves revising up your inflation forecasts while the balance of risk is that you will soon be revising downward your growth predictions,” he said. “It also poses a dilemma for our central bank. Moreover, it’s unlikely to be welcomed by an incumbent Government fighting what looks likely to be a very tight election.” BNZ still expects that first-quarter inflation will ease to 2.8%, but from there it will rise back to 3% in June and stay there for the rest of the year. Kiwibank chief economist Jarrod Kerr warned that the oil shock was badly timed for New Zealand’s economic recovery, saying “unfortunately, things are likely to get worse before they get better”. “A spike in the petrol prices acts like a tax on the consumer,” he said. The Taxpayers’ Union has called for a temporary fuel excise duty cut to soften the burden of spiking prices. Taxpayers’ Union executive director Jordan Williams noted that in 2022, Dame Jacinda Ardern’s Government “cut fuel excise by 25 cents per litre to ease the cost-of-living crisis caused by soaring oil prices following Russia’s invasion of Ukraine”. “A similar three-month reduction today would cost roughly $350 million in foregone revenue to the National Land Transport Fund, the same order of magnitude as the 2022 policy,” Williams said. He suggested cutting the Government’s spending to plug the $350m gap. Labour ultimately found the fuel tax cuts so popular they were extended, ultimately costing $1 billion, paid for from the Covid-19 Fund, which was borrowed. Deputy Prime Minister David Seymour said he was not a fan of the idea. “It is politically tempting, but with the Government in deficit, that money would be borrowed. A temporary fuel tax cut will be paid for by future taxpayers, that’s something I would’ve hoped the Taxpayer’s Union would think about,” Seymour said.