Wednesday 11/03/26

Middle East war live: US says it destroyed 16 minelayers near Strait of Hormuz (Financial Times, William Langley, Kieran Cash, Alexandra White and Peter Wells) highlights the latest developments in the Iran war as the Americans said that they had destroyed multiple Iranian vessels near the Strait and Israel continued its bombing campaign in Iran and Lebanon. Oil fell to around the $90 a barrel mark and Asian stock markets rebounded. Trump administration’s mixed messaging sparks wild swings in oil markets (Financial Times, James Politi, Lauren Fedor and Abigail Hauslohner) shows ongoing confusion about what’s actually going on as the US energy secretary said that the US Navy had “successfully escorted” an oil tanker through the Strait of Hormuz but then less than two hours later the White House press secretary denied it. * SO WHAT? * The oil market swung wildly on the messaging but then this is just another example of the confused statements we keep hearing from the Americans. Trump said on Monday that the conflict would end “very soon”, markets recovered, but then officials said that no end was in sight. The official line is that the US is seeking “unconditional surrender”, but that’s not happening at the moment and there’s no consensus on what the end game is.

Aramco warns of oil market ‘catastrophe’ unless strait of Hormuz reopens soon (The Guardian, Jillian Ambrose) cites the Saudi Arabian state oil firm’s warning about the “catastrophic consequences” of a prolonged blockage but, for now, says that it can still supply the market with about 70% of its usual crude output. Soaring fuel prices to cast long shadow across US economy (Financial Times, Myles McCormick, Jamie Smyth, Gregory Meyer, Christian Davies and Martha Muir) cites the latest official figures from the US energy department which show that US petrol prices rose by 19% over the last two weeks while diesel prices saw a 28% hike over the same time period – and they are not projected to fall to pre-war levels until at least the middle of next year! This is not going to do Trump any favours when it comes to the midterms as he has long campaigned to address the affordability crisis. Trump risks his very own Suez crisis (Daily Telegraph, Ambrose Evans-Pritchard) looks into this more deeply and draws comparisons with the British and French “victory” in the Suez war of 1956, which was successful from a military standpoint but ultimately proved to be a disaster because they didn’t anticipate the economic fallout. * SO WHAT? * The same fate could befall Trump if the war drags past the end of March. Some are now talking about a $200 a barrel oil price, which would be an absolute shocker for the global economy but although Trump maintains that America isn’t going to be affected all that much by oil price changes because America is a net exporter of oil, consumption is high. Americans drive twice as much each year as West Europeans, the average fuel efficiency of their cars is about half and they fly twice as far per capita. And it’s not just oil prices that will hurt – the Suez bottleneck will hit supplies of fertiliser that are badly needed for spring planting by American farmers.

Elsewhere, Oil-poor Asian countries push 4-day weeks and car pooling (Financial Times, A.Anantha Lakshmi) shows that countries including the Philippines, Thailand and Vietnam are already taking measures like limiting travel by government officials, ordering four day weeks, encouraging remote working and car pooling or cycling. Indonesia’s even looking to raise spending on fuel subsidies. * SO WHAT? * There is no easy exit to Trump’s war (Financial Times, the editorial board) is the main conclusion from all this because a clear endgame is not

apparent if you manage to look through all the bluster. The regime’s not going quietly at the moment, so that means it still needs eradicating or there will have to be compromise going forward. Compromise could mean prolonged uncertainty and ongoing tariffs with the ever-present possibility of another flare-up while eradication will take more time and resource. Even if the regime was eradicated, the chances of subsequent chaos would be high if there isn’t a ready-made solution and robust transition plan. Putting it bluntly, if Trump pulls out, the Iranian regime will claim victory and if he doesn’t, he’ll lose out at the opinion polls.

In terms of more day-to-day impact, Iran war risks inflating prices of laptops and phones (Daily Telegraph, James Titcomb) highlights more repercussions of a longer-lasting war as energy price spikes mean higher costs for the energy-intensive chip industry (TSMC accounts for 9% of Taiwan’s entire electricity demand!). That has prompted companies in Taiwan to warn about the impact on production. Qatar usually provides Taiwan with a third of its LNG – but exports have been suspended. The gas provides about half of Taiwan’s electricity (Australia also supplies it). Qatar is also one of its key suppliers of helium, which is used to cool silicon wafers during the chip manufacturing process. Companies and politicians in Taiwan and South Korea have been keen to calm panic by saying that there are adequate stockpiles of essential materials but of course, the longer the war goes on, the lower those stockpiles are going to get.

What the UK should learn from this energy crisis (Financial Times, Lex) suggests that the windfall tax – aka the Energy Profits Levy – should be reformed in order to unlock investment in the North Sea which has been hammered by current government. It won’t have any impact on the current crisis but it will make any future crises easier to deal with.

Then in Can Rachel Reeves afford to shield households from an energy shock? (Financial Times, Delphine Strauss and George Parker) we see that while the chancellor pledged earlier this week to do what she can to protect households from higher living costs, it’s moot as to whether she will actually be able to do this. Economists are currently saying that Reeves could hold off for now because higher prices aren’t going to start kicking in to household bills until July but the longer the crisis continues, the worse the situation is going to get or consumers. * SO WHAT? * We’re more vulnerable to moves in the energy markets than other European economies because we rely more on natural gas and because we have limited storage capacity. Things haven’t yet got as bad as they were when Russia invaded Ukraine but the longer this all goes on, the more the government’s hand is going to be forced to help households. However, it’s probably best for the government to adopt a wait-and-see approach for now because if things end quickly with a more amenable regime in place in Iran, the damage could be relatively short-lived.

Meanwhile, Government overcomes backbench rebellion to pass jury plan (Financial Times, Lucy Fisher and Suzi Ring) shows that the government’s Courts and Tribunals Bill passed the House of Commons yesterday in what was the biggest overhaul of the criminal justice system in modern times. Some of the most controversial aspects of the bill were the cut in the number of jury trials and a drop in the number of defendants able to claim legal aid. Justice Secretary David Lammy is trying to make progress with cutting massive court backlogs and while many agree with a lot of the Bill, the areas I’ve just identified have become particularly contentious.

Oracle shares rally as it reassures investors over its AI data centres bet (Financial Times, Rafe Rosner-Uddin) highlights a rally in the database company’s share price in trading yesterday thanks to a better-than-expected earnings announcement and positive outlook. Investors have been selling the shares in the company due to concerns about the massive AI datacentre spend. That being said, the share price is still about 50% off its autumn peak…

Then in Nvidia boss: non-geeks should become plumbers to make most of AI (The Times, Louisa Clarence-Smith) we see the billionaire boss of Nvidia offering some career advice – if you don’t have a PhD in computer science there will be plenty of jobs for electricians, pipe-fitters,

steelworkers, network technicians, installers and operators. He maintains that AI won’t take everyone’s job while other CEOs of firms like Anthropic and OpenAI talk of the seismic impact. * SO WHAT? * Not everyone wants these kinds of jobs or even has the aptitude for them. What about all those people who are already working? Will Ann from accounts or Dave from marketing all gladly retrain to become electricians? I really do think that the government is going to have to have a long term plan for people who want make career transitions – and that should be accompanied by concrete measures to stamp out age discrimination otherwise a lot of people are going to left on the scrapheap through no fault of their own.

In a quick scoot around some of today’s other interesting stories, The Dutch might have the answer to Britain’s youth unemployment crisis (Daily Telegraph, Emma Taggart) provides an interesting solution for the current state of UK youth unemployment – to adopt the system used in the Netherlands where they stagger the minimum wage for workers aged 15 to 21. This incentivises companies to employ younger, less experienced staff. So far, the UK government has been going in the opposite direction in trying to narrow the gap between the youth rate and the adult minimum wage. * SO WHAT? * I think that the narrowing of the gap sounds like the right thing to do but the fact is that it’s not working because employers are thinking that if they have to pay the same rate for someone with more experience versus someone with less or no experience, then they might as well go for the older applicant – or just not employ anyone at all. I would also argue that younger applicants are more likely to be living with parents, which means that they are better able to cope with lower rates while they get their experience up. Former health secretary Alan Milburn has been tasked with reviewing youth worklessness and is expected to deliver his recommendations in the summer.

Easiest time to rent a home in six years as competition eases (The Times, David Byers) cites research from Zoopla which shows that the competition among tenants for rental properties is at

its lowest level since before the pandemic thanks to more young people living with their parents and an increase in first-time buyers. As a result of this, it’s taking longer for landlords to let their properties. This echoes previous findings from Hamptons in January. * SO WHAT? * Some say that there is a window of opportunity now that could narrow because landlords are starting to sell up as we move closer to the Renters’ Rights Act, which means that the supply of rental property could shrink.

Then in Volkswagen to cut 50,000 jobs as China offers cheaper electric cars (Daily Telegraph, James Warrington) we see that VW is going to cut 50,000 jobs in Germany by 2030 and they will fall across the group, including the Audi and Porsche brands. * SO WHAT? * This is an increase from the 35,000 previously agreed with unions and it’s part of a broader move to save £16bn in costs per year. It is continuing to face ever-tightening competition from Chinese makers. VW’s latest annual results showed that profits fell by almost 45% in 2025, its lowest level since 2016 when the company booked a massive one-off charge for the Dieselgate scandal, so dramatic measures are clearly required.

This guy’s obviously pushing some kind of coaching plan (and no, I’m not an affiliate!) but if this is a test of longevity, I am not long for this world!!! Can you do this??