Escalation

UK suffers sharpest downgrade and is predicted to face joint highest inflation in G7 as growth forecasts are cutBusiness live – latest updatesA further escalation in the Iran war could trigger a global recession, spiralling inflation and a sharp backlash in financial markets, the International Monetary Fund has warned.Against an increasingly volatile backdrop, the Washington-based fund said the economic damage from the Middle East conflict was steadily rising as it cut its growth forecasts for 2026 based on the impact from the war so far. Continue reading...

• Israeli warplanes conducted targeted strikes against Hezbollah positions in southern Lebanon on April 9, resulting in significant structural damage to militant infrastructure, prompting retaliatory rocket fire across the Lebanese-Israeli border into northern Israel. • The UN Interim Force in Lebanon (UNIFIL) reported 12 cross-border missile launches from Lebanon and three Israeli air sorties within a 24-hour period, marking the most intense exchange since last month's ceasefire agreement. • Regional diplomatic channels convened emergency talks through US and French intermediaries, with UN Secretary-General expressing concern that "uncontrolled escalation could trigger wider Middle Eastern conflict" involving additional state and non-state actors.

• Pakistani and Indian troops exchanged heavy artillery fire across the Line of Control in Kashmir on April 8, 2026, killing 7 Pakistani and 5 Indian soldiers. • Pakistan accused India of initiating the clash near Uri sector; India claimed retaliation to 'unprovoked shelling' that hit civilian areas. • The incident risks broader conflict between nuclear powers, prompting US Secretary of State Antony Blinken to call for 'immediate ceasefire' in talks with both nations.

• President Trump threatened to destroy Iran's power plants and bridges if Tehran refuses a deal to end the war by Tuesday evening, amid a Pakistani ceasefire push. • Trump detailed a complex U.S. military operation that rescued the two-man crew of an F-15 shot down Friday in Iran, calling it one of the largest and most harrowing missions ever. • The threat looms over diplomatic efforts, including a 45-day ceasefire proposal to reopen the Strait of Hormuz and avert major escalation.

• A US fighter jet was shot down over Iran as military tensions between Washington and Tehran intensify dramatically. • The incident marks a significant escalation in direct military confrontation between the two nations amid ongoing threats and counter-threats. • US forces have deployed advanced long-range missile systems in response, positioning for potential large-scale operations.

• US forces under the Trump administration successfully rescued a second missing pilot in a tactical operation, demonstrating continued military capability amid the 37-day conflict with Iran. • The rescue allows the US to maintain focus on its ultimatum demanding Iran reopen the Strait of Hormuz or face military consequences, with a 10-day pause on strikes against Iran's energy plants.

• Türkiye positions itself at the center of diplomatic initiatives and alternative energy transit routes as U.S.-Israel-Iran hostilities enter their second month. • Foreign Minister Hakan Fidan conducted intense phone diplomacy and Gulf trips, coordinating with Egypt, Saudi Arabia, and Pakistan on ceasefire frameworks. • Ankara prioritizes preventing escalation, staying outside direct hostilities while warning against conflict expansion amid surging global oil prices.

• Houthi forces backed by Iran have initiated their first direct attacks on Israel since the broader conflict with Iran escalated, marking a significant expansion of regional hostilities. • The strikes represent Iran's strategy to broaden the conflict through proxy forces, testing Israeli air defenses and expanding the geographic scope of the war. • The US is responding by deploying additional military forces to the region while Secretary of State Rubio emphasized the conflict is expected to conclude within weeks.

• S&P 500 dropped 0.80%, Dow Jones fell 0.83%, and Nasdaq 100 declined 0.98% in early trading on March 24, 2026, amid Middle East tensions. • Crude oil surged over 4% to $91.80, up $3.67, as Iran's parliament speaker Mohammad Bagher Qalibaf denied US negotiations, contradicting President Trump's claims of productive talks. • Citi analysts warn prolonged conflict could push oil to $200 per barrel, heightening inflation fears and pressuring equities.

• President Donald Trump extended his deadline for Iran to reopen the Strait of Hormuz by five days on Monday, saying the U.S. will delay striking Iranian power plants to allow envoys to hold talks with Tehran leadership. • Trump stated his government was holding "productive talks" with Iran, but Iran denied any negotiations were occurring and fighting showed no signs of slowing. • An Iranian warhead with approximately 100 kilograms of explosives struck central Tel Aviv on Tuesday, causing significant damage, while Iranian missile attacks also hit Kurdish positions in Iraq, killing 6 Peshmerga fighters and wounding 30 others.

• Iran hit Qatar's Ras Laffan Industrial City energy hub with missiles on March 18, 2026, causing extensive damage to QatarEnergy facilities. • Tehran also fired four ballistic missiles at Riyadh and attempted a drone attack on a Saudi gas facility, both intercepted by Saudi defenses. • The attacks mark a major escalation in the US-Israel-Iran war, driving oil prices higher and disrupting global supplies.

• US financial markets face 'peak war panic' in 1-3 weeks amid US-Iran conflict entering its third week, with Strait of Hormuz effectively closed and oil prices at risk of hitting $200/bbl in 2026. • S&P 500 is down only 3% year-to-date and 5% from all-time high, indicating investors not yet panicking despite US attacks on Iran's Kharg Island oil terminal and deployment of 2,500 Marines to Mideast. • Escalation includes Iran targeting civilian infrastructure in Gulf neighbors and threatening major ports, potentially spilling over to agricultural commodities and semiconductors via shortages in fertilizer and helium.

Iran’s is trying to create wedges between Gulf states and the US, but Trump is very comfortable on the ‘escalatory ladder’In its current phase, the Israeli-US war against Iran and its proxies has become a proving ground for two competing concepts of military escalation, each of which threatens to become a trap.On one side, Donald Trump and Benjamin Netanyahu have failed thus far in their ill-defined and shifting strategic aims. Despite killing Iran’s supreme leader, Ali Khamenei, and other key leaders in the opening salvo of the campaign, the clerical regime remains and Iran’s stockpile of highly enriched uranium is unsecured. Airstrikes are intensifying and hitting a greater number of targets. Continue reading...

A missile struck a helipad inside the US Embassy compound in Baghdad on March 13, 2026, as reported by two security officials, prompting a renewed Level 4 security alert for Iraq due to threats from Iran-aligned militias. The embassy, one of the largest US diplomatic facilities, has faced repeated rocket and drone attacks, with militias recently intensifying strikes on bases hosting US and coalition troops. A separate drone strike in northern Iraq on March 12 killed one French soldier and wounded others in an international coalition force. These incidents underscore rising risks to US personnel as the US-Iran war drags into its third week.