Thursday 05/03/26

As the war rages on, Gulf insurance costs soar 12-fold despite Trump guarantee (Financial Times, Lee Harris, Jamie John and Malcolm Moore) shows that insuring a ship to sail through the Strait of Hormuz has now shot up by 12 times despite Trump offering to provide insurance and guarantees via the US Development Finance Corporation. That being said, London insurers couldn’t work out how this would work as the statement was very short on detail. The Gulf’s safe-haven status is under fire (Financial Times, the editorial board) says that the Gulf states’ reputation as an area of stability in an otherwise volatile Middle East is now under attack. Clearly, the rationale behind Iran’s assault on its neighbours is to put more pressure on them to, in turn, put pressure on the US and Israel to stop. The UAE is particularly adept at bouncing back from conflict but the longer this goes on, the deeper the impact is going to be. Meanwhile, Middle East conflict offers economic lifeline to Russia’s flagging war machine (The Guardian, Pjotr Sauer) shows that Russia is likely to benefit from all this because China and India are still going to need oil – and Russia can supply it to them! The proceeds will come in very useful for financing the war machine and Russia will be further helped by a potential slowdown in the supply of western arms to Ukraine. Closer to home, War in Middle East ‘could wipe out growth in UK living standards’ (The Guardian, Phillip Inman and Heather Stewart) cites the Resolution Foundation think tank as saying that any rise in living standards will be more than wiped out by rising oil and gas prices. And in the meantime, more people are dying…

Elsewhere, China warns of ‘challenges’ as it sets lowest GDP growth target in decades (Financial Times, Joe Leahy, Ryan McMorrow, Kathrin Hille and Thomas Hale) shows that China has set a GDP growth target of between 4.5% and 5% for the year, its lowest range since the 90s. This was blamed on the rise of geopolitical risks, slowing global economic momentum, the stubbornly difficult domestic property market and weak household sentiment. China is going to release its next five-year plan and global technology supremacy will feature. The government’s “work report” also used more aggressive language towards Taiwan than it has done previously. This time the government said that it would “resolutely crack down on ‘Taiwan independence’ separatist forces [and] oppose external interference”.

Elsewhere, EU to include UK and Japan in ‘Made in Europe’ plans (Financial Times, Ian Johnston) shows that the European Commission is going to offer to include some of its “like-minded” partners in its “Made in Europe” manufacturing targets in order to crowd out

competition from China. This would open up access to subsidies in clean technology, heavy industry and carmaking as long as EU-based manufacturers were offered reciprocal access. * SO WHAT? * This is a particularly notable development because the initial intention was to restrict this access to EU-based manufacturers only. It’ll be interesting to see whether this is tempting enough for others to join.

Anthropic chief back in talks with Pentagon about AI deal (Financial Times, George Hammond and Cristina Criddle) shows that there may be a way back for Anthropic as its CEO is still talking to the US defence department following the breakdown of negotiations last week that will result in Anthropic being frozen out of the Pentagon’s supply chain. * SO WHAT? * Defence secretary Pete Hegseth threatened on Friday to designate Anthropic as a supply chain risk, but this has not yet been acted upon. Anthropic wants to prevent AI from being used for mass domestic surveillance or lethal autonomous weapons. Clearly, the government just wants free-rein. Talks are ongoing…

Trump tells AI companies they need ‘PR help’ over data centre backlash (Financial Times, Joe Miller and Rafe Rosner-Uddin) shows Trump sticking his oar into the whole datacentres vs locals issue where locals are increasingly pushing back against the building of datacentres because they believe that their bills will go up. They also believe that their construction will damage the environment and strain local infrastructure. Trump said that AI companies needed “PR help” and promised that bills won’t go up any more because Big Tech would shoulder the energy costs of AI infrastructure. They would also have to invest more in the communities where they build the datacentres. It is worth mentioning that none of this is binding.

Then in Bitcoin and crypto stocks surge amid relief rally for risky assets (Financial Times, Nikou Asgari, George Steer and Jill R Shah) we see that bitcoin and shares in crypto companies rose yesterday following Trump making supportive noises on Truth Social. Coinbase, Robinhood, Gemini, Bullish, Circle, Strategy and Galaxy all put in strong performances as a result. * SO WHAT? * This sounds like a relief rally more than anything else as the sector has been sold off a lot recently – so I guess we’ll be seeing more volatility! Bitcoin hit $73,777 at one point, its highest level in a month.

Hiring a young person to cost almost £7,000 more under Labour (Daily Telegraph, Szu Ping Chan) cites analysis by the Institute for Fiscal Studies which said that employers face a 40% rise in costs under the government’s proposals to ditch the youth rate of the minimum wage. The government is against “discriminatory age bands” but the fact of the matter is that doing this is going to mean that employers won’t employ those extra people at a time where jobs are getting increasingly scarce. * SO WHAT? * The feeling is that plans to ditch the youth rate will be watered down as a number of Left-wing think tanks are warning that increase in employment costs are dissuading companies from taking people on. This is particularly pertinent at a time where youth unemployment is 16.1%, its highest level in a decade.

Britain’s unemployment rate now worse than Italy’s (Daily Telegraph, Tim Wallace) cites the latest official figures which show that the unemployment rate in Britain hit 5.2% at the end of last year, up from 4.4% a year earlier. Over the same period, Italy’s rate fell from 6.6% to 5.1%. * SO WHAT? * This is only the second time in over thirty years that the UK’s unemployment rate has exceeded Italy’s! It just goes to show how dire things have become under the current UK government and how well Italy – for so long being seen as Europe’s economic basket case – has done under Meloni. At the moment, it doesn’t sound like the government’s really going to do much about improving this state of affairs.

In a quick scoot around some of today’s other interesting stories, Three reasons to be hopeful for UK homebuilders (Financial Times, Lex) shows that the prospect of planning bottlenecks easing thanks to streamlined legislation, improved affordability and potential help for buyers to come from the government may actually outweigh the downbeat picture that Vistry’s CEO painted of the outlook yesterday. Still, Vistry’s share price hit lows that it’s not seen since the 2016 Brexit vote.

The student loans crisis hollowing out Britain’s university towns (Daily Telegraph, Pui-Guan Man) takes a look at the troubled student accommodation market and how it’s suffering due to weaker international student numbers and the rising trend of students staying closer to home when they study. Unite Group, Britain’s biggest student housing provider, said that vacancies were concentrated in places including Nottingham, Sheffield and Leicester. Vacancy rates are continuing to climb thanks to cost-of-living pressures, increasingly burdensome student loans and

tighter student visa policies. * SO WHAT? * If the government sticks with its policy on student loan repayment as is, it is likely that, over time, people just won’t go to university – and if that’s the case, there will be more properties lying vacant.

Then in Morgan Stanley to axe 2,500 jobs despite record revenues (The Times, Louisa Clarence-Smith) we see that the US investment bank has decided to cut around 3% of its global workforce across investment banking, trading, wealth management and investment management businesses. This is despite the bank reporting record annual revenues that were up a healthy 14% versus the previous year. Interestingly enough, the strong results came thanks to particularly strong performances from investment banking, trading and wealth management. * SO WHAT? * AI wasn’t specifically mentioned as a driver for this. However, I think that it is worth pointing out that this kind of stunt isn’t all that unusual at investment banks – it’s a “fun” way for them to keep everyone on their toes…

I eat pasta – and I think that a lot of you probably do too – so I thought that this might come in useful for you! It’s a ranking of pasta from best to worst!