Monday 23/06/25

So things got turned up a notch in the Israel-Iran war over the weekend. Donald Trump gambles his presidency as US enters war with Iran (Financial Times, James Politi, Lauren Fedor and Steff Chávez) highlights Trump’s big gamble as he approved the attack on Iran on Saturday night, betting that Israel’s initial crippling strike would limit US involvement whilst making a decisive move now would maximise chances of success and force Iran to go for a settlement. If he’s successful, he will have achieved something that America has not been able to do in decades – eliminate the Iranian nuclear threat. However, Trump faces backlash from Maga base after strikes on Iran (Financial Times, Guy Chazan) shows that some of his staunchest supporters were against US strikes on the nuclear facilities in Fordow, Natanz and Isfahan for fear of entering yet another “forever war” while How the US used stealth and decoys to launch surprise attack on Iran (Financial Times, Demetri Sevastopulo, Henry Foy, James Schotter and David Sheppard) goes into more detail on how it was carried out. In short, a pair of B-2 stealth bombers ostensibly flew to the Pacific, as if they were going to Guam. They were decoys. At the same time, seven other B-2s flew east in stealth mode and then dropped 14 huge bunker-buster bombs on Iran’s nuclear sites in Operation Midnight Hammer. This effort was also helped by Trump talking about a two-week timeline for negotiations, which will have added to the element of surprise. Also, most allies got no notice. Even the UK only got a few hours’ notice – but the US did co-ordinate with Israel. Trump taunts Iran with prospect of ‘regime change’ after strike on nuclear sites (Financial Times, Steff Chávez, Demetri Sevastopulo, James Politi, Najmeh Bozorgmehr, Bita Ghaffari and Neri Zilber) shows the way that Trump’s thinking in a post on Truth Social after the bombers returned to Missouri, which said that “It’s not politically correct to use the term, “Regime Chance,” but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn’t there be a Regime change??? MIGA!”. The perils of war with Iran (Financial Times, Gideon Rachman) shows that while Iran’s longtime efforts to push its interests across the region, via the sponsoring of Hizbollah, Hamas and the Houthis, have now failed. All the while, Iran advanced its efforts to make its own nuclear bomb. Assad’s regime has fallen, Hisbollah and Hamas have been greatly depleted by Israel and now the Iranian regime itself is under direct pressure. The main problems here lie in what happens next because it is going to take a lot for the US to be able to claim a real victory, which would entail a complete dismantling of Iran’s nuclear programme and a regime change to a pro-western government. Neither of these look likely at the moment. Even if the regime fell, there could be civil war that could then drag neighbouring countries (and potentially the US again) into the mess and/or incubate terrorists. Iran, Israel and the US are all losers here because Iran is going to be unstable, whichever way you look at it, Israel’s too small to become the leader of the Middle East and could be blamed for bringing the US into another forever war (something that could hit Trump’s standing in the midterm elections at the very least) while US involvement could divide Trump’s support and empower the Democrats.
Trump has opened a Pandora’s box (Financial Times, Edward Luce) emphasises that Trump is not in control of what’s going to happen next and there’s a risk that this action could define his presidency both domestically and internationally. If Iran’s regime gives up, his actions would be applauded but if this escalates into a full war then it could be bad for his presidency. In doing what he did over the weekend, he not only bypassed Congress, he probably also broke international law. Trump’s step into the dark (Financial Times, the Editorial Board) observes that America’s intervention now gives Iran an excuse to attack energy assets in the Gulf along with US bases and ships around the Middle East.

In terms of retaliation, Iran vows revenge on US, threatening to block vital shipping lane (The Times, Gabrielle Weiniger, Marc Bennetts, David Charter and Joshua Thurston) shows that Iran is threatening to block the key Strait of Hormuz trading route but although parliament voted to do so, Iran’s leaders are also considering other options. 20% of the world’s oil supplies travel through the Strait of Hormuz. US warns Iran closing Strait of Hormuz would be ‘economic suicide’ (Daily Telegraph, Matt Oliver and Kieran Kelly) shows that America is against this move and Iran steps up repression amid warnings of terror attacks in UK (The Times, Fiona Hamilton, Matt Dathan and George Greenwood) highlights the case of the family of a UK-based journalist who have been detained in Tehran. The family of one of Iran International’s presenters have been taken into custody by the Islamic Revolutionary Guard Corps. The independent Iran International has its HQ in London and holds the Iranian regime to account. They want the journalist to resign.

More broadly, Oil price jumps after US strikes Iran (Financial Times, Tom Wilson and Jamie Smyth) shows that oil prices hit a five-month high on news of the bombing, Oil ‘will surge above $100 a barrel’ if Iran blocks Strait of Hormuz (The Times, Emily Gosden) cites analysts who believe that oil prices could breach $100 a barrel if the Iranians decide to block the Strait although Oil prices steady as investors wait for Iran response (The Times, Gabrielle Weiniger, Marc Bennetts, David Charter and Joshua Thurston) show that prices calmed down after the initial spike mentioned above. Jet fuel prices soar in Europe as war in Middle East threatens supplies (Financial Times, Malcolm Moore) highlights another consequence of this as diesel and jet fuel prices have now hit 15-month highs while British Airways and Singapore Airlines cancel Dubai flights after US bombs Iran (Financial Times, Kana Inagaki, Mari Novik and Chloe Cornish) heralds other immediate actions as over 150 carriers have now diverted or suspended flights that enter airspace over Israel, Iraq and Jordan. This is going to be especially difficult for European carriers who already have to avoid Russian airspace to fly to Asia.

In terms of reaction in the region, Gulf allies shaken by Trump’s Iran strikes (Financial Times, Chloe Cornish and Andrew England) shows that Gulf states are in a bit of a pickle given that Iran has long been a military and political rival in the region, their high profile support of Trump in recent weeks will put them in Iran’s crosshairs. The countries in the region have been trying to avoid this situation by pursuing years of diplomacy. Gulf nations like Saudi Arabia and the UAE are within reach of Iran’s short range missiles and host key US military bases – so things could get nasty. Reactions have been varied, but Bahrain sent 70% of its civil servants home, initiated remote learning from schools and advised motorists to avoid main roads. At the moment, Gulf states are voicing support for Iran but also maintaining relations with the US. * SO WHAT? * Overall, it all depends how Iran decides to react. If it decides to retaliate, in addition to all the obvious human cost, this is bound to destabilise the global economy by making oil prices more expensive, pushing up freight rates and slowing down global commerce which has already taken a hit from Trump’s tariffs. It will push up living costs and could potentially hit airlines and tourism around the world – but particularly in the Middle East. You do wonder whether we’ll see more emigration from the region as a result. Although it’s too early to call I would bet my mortgage on there being an exodus of rich people. Even if Iran decides to capitulate completely (which I doubt) there will be enough resistance and ill-feeling in the region that will make things edgier for some time to come.

In other defence-related news, Spain secures opt-out from new Nato spending goal, says Sánchez (Financial Times, Barney Jopson and Henry Foy) highlights a deal for Spain not to have to increase its defence spending to 5% of GDP, the target demanded by Trump. At the moment, the country is not even meeting NATO’s current target of 2% of GDP! All eyes will now be on Italy, Belgium and Portugal who will also find it tricky to hit this target. Spain reckons it’ll be able to hit all of its NATO obligations by spending 2.1% of its GDP on defence. * SO WHAT? * Is this because of Spain’s pacifist streak? Or is it a distraction to curry favour with an electorate that is currently being faced with governmental corruption allegations??

Elsewhere, Taiwan launches unity drive as China threat looms (Financial Times, Kathrin Hille) shows that Taiwan’s president launched a drive for national unity yesterday to unify his people in the face of ongoing Chinese aggression. He reiterated Taiwan’s independence but this could prove to be problematic if China decides to step things up militarily.

Back home, Energy prices cut for business as part of UK industrial strategy (Financial Times, Anna Gross, Ashley Armstrong and Jim Pickard) highlights the unveiling by PM Starmer of a new “British Industrial Competitiveness Scheme” later today that will invest £2bn over four years to reduce energy prices by up to 25% for thousands of businesses as part of this wider strategy. It will affect sectors including automotive, aerospace and chemicals. The scheme will exempt companies from having to pay various green levies and will come into effect in 2027. * SO WHAT? * This is great news for those who are encompassed by this, but not so much by companies in other sectors like retail and leisure who have complained for a long time about the effect of high energy bills and rising staff costs – and don’t get a look in. At the moment, it’s not clear how the government will finance these policies.

Who are the companies hoarding bitcoin? (Financial Times, Philip Stafford and Ray Douglas) is a really interesting article which takes a look at which companies are stockpiling bitcoin! Over the last year, the amount of bitcoin that companies hold has skyrocketed by almost 170% so now around 130 listed companies hold a total of $87bn of bitcoin combined, according to the latest data from BitcoinTreasuries.net. This is equivalent to about 3.2% of all the bitcoins that will ever exist. One firm that has transformed its fortunes is software company MicroStrategy – now called Strategy – which became a $100bn company by becoming a bitcoin-buying vehicle. Companies in the US, Japan and France are now are jumping on the bitcoin bandwagon by selling shares and bonds and putting the proceeds into bitcoin. TMTG, Twenty One, Tesla and one-time hotel developer Metaplanet are among the companies deciding to plough money into bitcoin whatever their main business is. Block – originally known as Square and founded by former Twitter chief Jack Dorsey – started investing in bitcoin in October 2020 and continues to advocate that bitcoin will “ultimately become the native currency of the internet”. * SO WHAT? * This is all pretty

amazing and once again shows bitcoin approaching the mainstream. Although I’m not sure that shareholders will be comfortable with so much exposure to it, the more companies and individuals pile in, the more it’s going to go up – and therefore justify the decision to jump on the bandwagon in the first place. I think that as long as proper risk controls are put in place there’s nothing wrong with this. It may make for some sleepless nights down the road though!

In Spac revival puts spring in step of investors in New York (Financial Times, George Steer) we see that SPACs are coming back after a few years in the wilderness. Last week’s SPAC Conference 2025 was hosted in New York and was attended by a record number of guests. This has come at a time of uncertainty for conventional IPOs and there was talk of “renewed focus on quality deals and due diligence…[and a] shift to prioritising SPAC targets in desirable industries with sold revenue”. Well I’ll believe it when I see it! Right now, crypto is driving the SPAC boom – so we’ll have to wait and see how this turns out!

Tesla launches robotaxi service in Austin (Financial Times, Rafe Uddin, Stephen Morris and Kana Inagaki) heralds the launch of Tesla’s much-anticipated Model Y robotaxis yesterday with 10 vehicles and a safety driver on board with customers paying a $4.20 flat fee. Tesla’s Robotaxis Are Here: What You Need to Know (Wall Street Journal, Becky Peterson) says that the company ultimately wants to introduce two specially-designed robotaxis – the small gold-coloured Cybercab sedan and a large multiseater called the Robovan, neither of which have steering wheels or pedals. The aim is to have them on the road sometime in 2026. At the moment, though, passengers must be over 18 and vehicles can only take a max of two passengers. * SO WHAT? * This all sounds great and the company wants to expand to San Francisco, Los Angeles and San Antonio with hundreds of thousands of vehicles driving fully autonomously on American roads by the end of 2026. However, it still needs to prove safety!

Talking of taxis, Are air taxis set for take-off or are there still many headwinds? (The Times, Robert Lea) indicates that the future of air taxis is looking a bit shakier. The CEO of Rolls-Royce

said at The Wall Street Journal CEO Council Summit earlier this month that the reason why his company ditched investment in this area despite having invested around £100m was because this read looked more problematic and that the returns from SMRs would be much better. He added that the cost of the flying taxis kept going up. Originally, they were going to cost £1m each but this edged up to £3m. * SO WHAT? * Britain’s Vertical Aerospace was in big trouble because of Rolls-Royce pulling out because it had been working closely with the engineer and rival German start-ups Lilium and Volocopter fell into insolvency. Vertical has survived, just, and Trump sounds like he’s going to give flying taxis a boost as one of his executive orders aimed to bring a close to the “regulatory deadlock” around flying taxis in the US. Rival operators include Joby Aviation, Archer Aviation, Wisk Aero, Beta Technologies and EHang. I maintain my own scepticism about this as it’s difficult enough to find places to fly drones anyway – let alone flying taxis with people in them! And what about drone deliveries?? I just think it’s not practical. It sounds great but too expensive. I still think military use is the way to go – particularly in the world we’re seeing at the moment!

In a quick scoot around some of today’s other interesting stories, Summer goods give Sainsbury’s a boost (The Times, Isabella Fish) highlights improved sales for the supermarket thanks to warmer weather prompting customers to buy lollies, bags of ice, barbeque meats and rosé wine.

Elsewhere, UK AI start-up PhysicsX nears $1bn valuation (Financial Times, Kieran Smith) shows that the London-based AI start-up has raised $135m from investors at its latest funding round, giving it an implied valuation of almost $1bn as it takes advantage of an uptick in interest in defence tech. The company uses AI to better design products in the manufacturing and defence industries.

Then in Tourist spending in UK subdued by inflation and strong pound (The Times, Jack Barnett) we see that the latest figures from the CEBR show that retail spending per tourist is likely to grow by half the expected rate of GDP growth by 2030 thanks to the impact of high inflation, a strong pound and the end of VAT-free shopping.

Here’s a potential breakfast option for you – but you will definitely need a decent non-stick pan for this!