Economic

• The US-Israeli war on Iran, initiated February 28, 2026, with strikes on leadership and nuclear facilities, has led to Iran's Strait of Hormuz closure, rivaling 1970s oil crises. • Supreme Leader Ali Khamenei's killing sparked Iranian strikes on Israel and US bases, disrupting 20% of global oil transit and surging prices by 40%. • US markets face inflation risks, with experts warning of recession if chokepoint remains closed beyond two weeks.

President is expected to offer a timeline for end of the war, and speak about his threat to withdraw the US from Nato as he faces falling poll numbers and global energy crisisTrump says he is ‘absolutely’ considering withdrawing US from Nato Israel hits Iran with waves of attacks and says it killed top Hezbollah commanderWelcome to our continuing coverage of the crisis in the Middle East, as Donald Trump prepares to address America for the first time since the US-Israel war on Iran was launched.The president will deliver the prime-time speech at 9pm ET from the White House.Iran has rejected Donald Trump’s claim that its leadership asked for a ceasefire, calling the US president’s statement “false” and “baseless”. Trump made the claim in a post on Truth Social, which said: “Iran’s New Regime President, much less Radicalized and far more intelligent than his predecessors, has just asked the United States of America for a CEASEFIRE! We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!”Trump also said he is “absolutely” considering withdrawing the US from Nato, warning that the matter was “beyond reconsideration” after the refusal of US allies to join the US-Israeli war against Iran. The president’s threats, his most determined to date, have left the alliance facing its worst crisis in its 77-year history, a former US ambassador has said. Here’s our story.Meanwhile, in an open letter to the American people, Iran’s president Masoud Pezeshkian said relations between Washington and Tehran were “misunderstood” and that Iran was not an aggressor. The Iranian “harbor no enmity toward other nations, including the people of America, Europe, or neighbouring countries,” he said, adding that portrayals of Iran as a security threat were inaccurate, and Tehran was acting in self-defence – not aggression.In Tehran, Kamal Kharazi, a top foreign policy official and former Iranian foreign minister, has been severely injured in an airstrike on his home in the Iranian capital. His wife was reportedly killed in the attack. Kharazi, considered a moderate politician and veteran policy expert, also served as an adviser to the assassinated former supreme leader Ayatollah Ali Khamenei. Reports suggest his targeting is being viewed as an attempt to derail diplomacy. Continue reading...

• U.S. nonfarm payrolls for March will be released Friday amid sharp energy price increases due to Middle East conflict, providing critical snapshot of labor market health as investors reassess economic outlook. • HSBC economists expect "modest but positive growth" in employment, though markets have slashed expectations for Federal Reserve rate cuts, with money markets pricing only 42% probability of a rate increase in 2026. • This week's data releases—including ADP private payrolls (Wednesday), JOLTS job openings (Tuesday), jobless claims (Thursday), and consumer confidence surveys—will reveal war impact on business and consumer sentiment.

• The benchmark S&P 500 fell for a fifth consecutive week and is down more than 7% since U.S.-Israeli military strikes on Iran in late February. • Rising volatility and shifting rate expectations continue to pressure equity markets as geopolitical tensions compound economic uncertainties. • Market participants are reassessing expectations for Federal Reserve policy, with implications for growth stock valuations.

Energy minister Michael Shanks reassures drivers ahead of chancellor’s statement to MPsGood morning. At lunchtime Rachel Reeves, the chancellor, will give a statement to MPs that will cover what the government is doing, and (more tentatively) might do, in response to the soaring global energy prices caused by the Iran war. After Russia invaded Ukraine in 2022, also creating a global energy shortage, the Conservative government ended up spending £40bn supporting families and firms with energy bills over the following winter. Reeves’s problem is that she has not got £40bn spare. With spring upon us, and people starting to turn down their central heating, the issue may not seem particularly pressing in many households (although heating oil and petrol prices are already soaring.) But, by the end of this year, this could be the sort of colossal economic crisis that gets remembered for half a century.As Chris Mason explains in a good preview, Reeves is expected to cover three points. She is expected to confirm that the government wants to give the Competition and Markets Authority new powers to deal with any potention profiteering by oil companies. She will confirm that the government wants to go “further and faster to secure the next generation of nuclear power and to reclaim Britain’s place as a leading nuclear nation” (as the Treasury puts it in its overnight preview).[Drivers] should do everything as absolutely normal because there is no shortage of fuel anywhere in the country at the moment. We monitor this every single day, I look at the numbers personally. There’s no issue at all with that …People should go about their business as normal. That’s what the RAC and the AA have said. It’s really important people do that. There’s no shortage of fuel and everything is working as normal.Look genuinely, people shouldn’t change their behaviour or their habits in the slightest. Continue reading...

• United Airlines Holdings (UAL) announced plans to reduce scheduled capacity by approximately 5% in the second and third quarters of 2026, citing economic pressures. • The airline's stock fell 1.95% in pre-market trading on Monday following the capacity reduction announcement. • The move reflects broader market concerns about supply chain disruptions and financial contagion stemming from escalating geopolitical tensions and rising energy costs impacting corporate profitability.

Britain authorises use of military bases to strike Iranian missile launchers that target shipping in strait of HormuzPresident Trump branded the UK and other Nato allies “cowards” on Friday amid growing anger among cabinet ministers that his war in Iran could jeopardise Britain’s fragile finances. Senior members of the government are in despair about the potential effects on the economy, with experts warning of higher energy prices and mortgage and borrowing costs. They have already begun contingency planning in case the conflict is protracted – lowering speed limits to minimise fuel consumption is among the measures that could be considered by transport officials.With conflict continuing to escalate, the UK confirmed it was now authorising the use of British military bases to strike Iranian missile launchers that are targeting commercial ships in the strait. Continue reading...

• The Federal Reserve's policy committee decided to hold the federal funds rate steady at 3.5% to 3.75% on March 18, 2026, citing elevated uncertainty about the economic outlook and the implications of Middle East developments for the U.S. economy. • The Fed noted that while economic activity continues to expand at a solid pace, job gains have remained low and unemployment rates have shown little change, with inflation remaining somewhat elevated above the 2% target. • The Committee signaled readiness to adjust monetary policy if risks emerge that could hinder maximum employment and price stability, indicating a cautious stance given current geopolitical and economic headwinds.

Offer to reform taxes, tackle ‘rip-off Britain’ and overhaul fiscal rules could tempt exasperated Labour supportersZack Polanski says Greens would ditch GDP targets and focus on wellbeing insteadThe venue for Zack Polanski’s economic speech on Wednesday – a sunny north London garden centre – could hardly have been more different to the sombre City backdrop for Rachel Reeves’s Mais lecture on Tuesday.The chancellor was, as it happens, the last politician to give a major economic speech at the New Economics Foundation (NEF), the leftwing thinktank that invited the Green party leader, Polanski, to set out his stall as part of its 40th anniversary celebrations. Back in 2018 it hosted the speech in which, as a backbencher, Reeves called for an “everyday economics” that would prioritise the needs of low-paid workers. Continue reading...

• The U.S. Senate unanimously passed the Small Business Innovation and Economic Security Act (S. 3971), extending the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for five years. • SBIR and STTR provide critical federal funding helping small businesses translate research discoveries into commercial technologies, often in partnership with universities. • The bill now moves to the House for consideration, with the earliest possible vote expected after March 16, 2026.