British Treasury chief John Healey faces a fine balancing act when he delivers his first budget statement Wednesday, with the economic backdrop made more difficult as a result of the turmoil caused by the Iran war.

Healey, who was appointed Chancellor of the Exchequer in July when Andy Burnham became prime minister, takes center stage when he stands up in the House of Commons in what is arguably Parliament’s key set-piece of the calendar.

Even though the British economy has been more resilient than anticipated this year and has grown strongly, the problem is that the money just isn’t there for Healey to enact many of the Labour government’s ambitions on restoring the health of the country’s public services.

The U.K.’s economy has been hit — like others — by the inflation generated by the Iran war and the ensuing bottlenecks in the Strait of Hormuz, which have squeezed global oil and gas supplies.

Inflation in the U.K. has risen to a near one-year high of 3.5% as the Iran war continues to ratchet up fuel prices, and is expected to go higher in coming months.

As a result, the Bank of England is expected to raise interest rates soon, which will further raise the costs to the government of servicing the debt.

Budget expected to be relatively low-key

As a result, Healey’s budget is expected to be relatively low-key, especially at a time when bond markets are fretting over debt levels around the world.

France has been in the spotlight recently following a wave of protests that have exposed the parlous state of its finances.

Read full reporting by AP here.