Closing summary
Time for a recap.
Fears of a “Trumpflation” hit to UK households from the Iran war are rising.
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Average fixed mortgage rates on both two and five-year loans have risen again today, data from MoneyFacts shows.
The jump comes three days before the Bank of England sets interest rates, with policymakers widely expected to leave borrowing costs unchanged.
The turmoil in the lending market means the lifetime of many mortgage products has shrink in recent weeks.
Petrol and diesel prices have risen today too, according to the RAC, who forecast further rises in the coming days.
But there are signs of relief in the energy market today. Crude oil prices have dropped, after treasury secretary Scott Bessent said the US was letting Iran continue to ship its oil via the Strait of Hormuz.
Brent crude is now down 1.1% today at just below $102 a barrel, having hit $106.50 when trading began last night.
The UK government has announced £53m of support for households reliant on heating oil.
UK petrol and diesel prices up again
The cost of petrol and diesel has risen again today, as retailers continue to raise prices at the pumps.
The RAC reports that the average price of a litre of petrol has risen to 141.74p, a rise of around 30p today. Diesel is up 60p to 161.20p a litre.
Last week, chancellor Rachel Reeves asked the competition watchdog, the Competition and Markets Authority (CMA), to “crack down” on “rip off” fuel prices.
But despite that intervention, the RAC suspects further price rises are probably around the corner.
RAC head of policy Simon Williams said:
“Drivers with diesel cars are really feeling the heat with the average price at the pump climbing above 161p a litre for the first time since early November 2023. Prices have shot up 19p a litre in just over two weeks, adding over £10 to the cost of a full tank. The average cost of filling up a 55-litre family car with diesel is now £88, whereas for petrol it’s £78.
“RAC analysis of wholesale fuel data shows that petrol is now likely to rise in the next week or so by another 3p to an average of 145p a litre and diesel by 9p to 170p.”
Oil price falls as Bessent says US is letting Iran ship oil
The oil price is falling after US Treasury Secretary Scott Bessent told CNBC that the US is allowing Iran to continue to ship its oil via the strait of Hormuz.
In an interview with CNBC, Bessent indicated that the White House was “fine” that some Iranian, Indian and Chinese ships were going through the strait.
Bessent said:
“We are seeing more and more of the fuel ships start to go through. The Iranian ships have been getting out already, and we’ve let that happen to supply the rest of the world. We’ve seen Indian ships go out now … we believe some Chinese ships have gone out.”
“That should start ramping up before there are any of the flotillas or protective armadas in the Gulf. So we think that there will be a natural opening that the Iranians are letting out. And for now, we’re fine with that. We want the world to be well supplied.
This appears to be easing the pressure on the oil price. US crude is down 3.7% today at $95.05 a barrel, while Brent crude is 1.2% lower at $101.86.
Over the weekend, Iran’s foreign minister Abbas Araghchi insisted the strait was not closed, except to the ships of Iran’s “enemies and those who support them.”
UK government borrowing costs are dropping, which should cheer chancellor Rachel Reeves.
With bond prices rising, the yield (or interest rate) on two-year, 10-year and 30-year UK bonds are all dropping.
The benchmark 10-year gilt yield is down 8 basis points (0.08 percentage points) to 4.73%, as the drop in the oil price today soothes some concerns about inflation.
Updated
Ths dip in oil prices today is supporting stocks, reports Joe Mazzola, head trading & derivatives strategist at Charles Schwab:
“After a third straight weekly drop pushed the S&P 500 Index to nearly four-month lows, investors face several central bank meetings, an Nvidia (NVDA) conference, and earnings from chip giant Micron (MU) in coming days. So naturally, Wall Street focused this morning on crude oil prices and the war in the Middle East.
Stocks edged up early as crude slipped, though investors might want to remember that recent rallies often faded.”
Oil now falling
Happy news in the fight against Trumpflation – the oil price is dropping.
Brent crude, the international benchmark, is now down 2.2% this session at $100.87 a barrel.
US crude is dropping faster; down 4.7% today at $94 a barrel.
This follows the resumption of some oil loading at the UAE’s port of Fujairah today after a damaging drone attack.
Wall Street’s main indexes have opened higher at the start of the new week, despite the ongoing conflict in the Middle East.
The Dow Jones Industrial Average has gained 329 points, or 0.7%, in early trading to reach 46,887 points. Tech stocks are rallying, with Nvidia up 2.3% and Salesforce rising by 2.2%.
The broader S&P 500 index is up 1%.
The body that advises the world’s central banks has urged policymakers not to overreact to the Iran crisis-driven spike in global energy prices.
The Bank for International Settlements (BIS), which is known as the “bank for central banks”, said the current surge in oil and gas prices was a textbook case of when to “look through” a shock.
In its latest report, BIS urged central bankers to show caution.
BIS economic advisor, Hyun Song Shin, explained:
“If it’s a supply shock, and certainly if it’s a temporary one, these are the textbook examples where you should look through and not react with monetary policy.”
Trumpflation is being driven by the oil price, which has surged since the Iranian war began.
Brent crude oil has surged 42% while WTI (US crude) is 47% higher in the two weeks after the strikes, Deutche Bank point out in a research note today.
But apart from oil, and commodities, every other asset in their regular chart is down since the strikes began:
Deutsche Bank told clients:
On a relative basis, US assets have fared better, reflecting their more limited exposure to any oil shock as a net exporter. So, in total return terms the S&P 500 is down -4%, whereas the STOXX 600 is down -6% (and -9% in USD terms).
Sovereign bond yields have also spiked sharply. For US Treasuries, the 2yr and 10yr yield are each up +34bps. Meanwhile 2yr German yields are up +44bps, and the 10yr yield is up +34bps, closing at a post-2011 high of 2.98% on Friday.
Similarly for sovereign bonds, US Treasuries are down -2%, and Euro Sovereigns are down -6% in USD terms.
If we drill down into the different sectors, all the big sector groups in the S&P 500 have lost ground, with the clear exception of energy (+3.2% in total return terms).
Interestingly, tech has the strongest sectoral performance after energy, only down -1.2% since the strikes.
TUC: more help needed to stave off ‘Trumpflation'
TUC General Secretary Paul Nowak has also welcomed Keir Starmer’s announcement of £53m of support for households who use heating oil, but warned that more help will be needed to protect the UK from ‘Trumpflation’:
“Working people are being hit with a Donald Trump-made cost of living crisis. It’s right that the Prime Minister has acted quickly to support those most acutely affected by rising energy prices.
“This illegal war and ongoing chaos will continue to threaten living standards. More support will likely be needed to stave off ‘Trumpflation’.
“The Prime Minister is right to call for rapid deescalation in the Middle East. The Government must stand ready to pull out all the stops and shield households and firms from this global shock.”
Updated
Building materials group CRH to delist from London Stock Exchange.
The City is losing one of its bigger names, with building materials group CRH announcing it will delist from the London Stock Exchange.
The move comes two and a half years afer CRH, which is valued at £50bn, moved its primary stock market listing to the US from London.
CRH attributes the decision to the level of trading activity for its ordinary shares on the LSE as well as the additional cost, regulatory and administrative obligations arising from retaining the LSE listings.
Susannah Streeter, chief investment strategist at Wealth Club, says:
“The delisting of CRH isn’t a complete surprise, given that it had already switched its main listing to New York and three quarters of its profits are reliant on its operations in North America. However, with yet another big name heading Stateside, it will still be a significant blow to the London Stock Exchange.
It comes after a flurry of other companies have taken flight from the UK to seek greater fortune under a New York listing. At the same time, there has also been a trend of global giants swallowing big fish from the UK pond, with acquisitions such as Schroders by Nuveen still front of mind. Each high-profile departure shrinks the UK’s listed market and reinforces the perception that companies are finding deeper pools of capital and higher valuations across the Atlantic.
Oil dips after loading resumes at UAE's Fujairah port after drone attack
The oil price has dropped back, following reports that oil loading operations have resumed at the United Arab Emirates port of Fujairah after a drone attack.
Exports from Fujairah were disrupted after the attack triggered a fire in the emirate’s petroleum industrial zone, but Reuters reports that operations have now resumed.
Civil defense teams were working to control the blaze, the Fujairah government media office said in a statement, adding that no casualties were reported.
Greenpeace have welcomed the UK government’s pledge of support for those on heating oil, while emphasising the need to shift off fossil fuels.
Paul Morozzo, senior climate campaigner for Greenpeace UK, says:
“Households dependent on heating oil are at the sharp end of Trump’s chaotic war on Iran, which has rapidly pushed up the price of oil and gas.
It’s vital for the government not to abandon people to the profiteering suppliers of volatile fossil fuels, but while citizens can be protected to some extent the UK will still be paying inflated prices, even if it’s on our taxes rather than our bills. The only way to achieve long-term stability in energy prices is to get off the fossil fuel rollercoaster and accelerate the transition to clean, homegrown energy sources we can control.”
UK government to spend £53m helping rural communities with rising cost of heating oil
Sir Keir Starmer has announced £53m of support for rural communities to help with the rising cost of heating oil.
At a press conference this morning, the prime minister said energy companies should not profit from price rises caused by the war, and reassured households that the planned fall in the energy price cap from April to June will take place.
And on heating fuel, he says:
The CMA [Competition and Markets Authority] reported last week what every heating oil customer already knows. There are accounts of suppliers cancelling orders and jacking up prices. Now that kind of conduct is completely unacceptable. So if the companies have broken the law there will be legal action.
Because it’s clear this market is under regulated, we’re going to put that right to ensure customers get a better deal.
But we won’t just wait for that. I’m announcing immediate support for vulnerable heating oil customers today, providing £53m for those households that are most exposed.
Our Politics Live blog has full coverage of the press conference, where Starmer is being quizzed about the Iran war
UniCredit launches ‘unfriendly' takeover bid for Commerzbank
Two European banking powerhouses have become embroiled in a €35bn (£30bn) takeover battle after Italy’s UniCredit stepped up its long-running pursuit of German lender Commerzbank, despite strong opposition from the German government.
UniCredit first took a stake of 9% in Commerzbank in September 2024 and has since built up its holding to just under 30%. It said on Monday it was pushing to increase that holding further and push the rival lender into formal merger talks.
Under German law, a shareholder that has a more than 30% stake is required to make a takeover bid. The Milan-headquartered bank said on Monday it was planning a share swap that would imply a €30.8 price per Commerzbank share, or about €34.7bn in total. Commerzbank’s share price rose to €31.30 on Monday in early trading.
UK mortgage rates jump again
Oof! Average UK mortgage rates have jumped this morning.
Data provider Moneyfacts has reported that the average 2-year fixed residential mortgage rate has risen to 5.20% today, up from 5.10% on Friday. It was just 4.84% on the eve of the US-Israeli war on Iran last month.
The average 5-year fixed residential mortgage rate today is 5.25%, up from 5.19%.
That reflects rising expectations in the City that the Bank of England will not cut interest rates this year, and is likely to raise from back to 4% (from 3.75%) today by summer 2027.
[although, as flagged earlier, Goldman Sachs still expect two rates cuts this year].
Moneyfacts also shows a drop in the number of residential mortgages on the market – down to 6,972 today, from 7,106 at the end of last week.
Houmous and pet grooming added to UK inflation basket
Houmous, alcohol-free beer, pet grooming, motorhomes and dashboard cameras have all been added to the basket of goods used to track UK inflation.
The Office for National Statistics has decided to include these items, as part of its regular adjustment to the products it tracks to measure the cost of living.
To make space in the virtual basket, bottled premium lager bought in pubs and restaurants have been ejected. The ONS will also ditch sheets of wrapping paper in favour of rolls of wrapping paper, which are easier to track.
Tell us: has the conflict in the Middle East affected your household or business costs?
We’d like to hear from people in the UK who have seen the cost of goods or services increase or experienced delays, cancellations or other disruptions…..
Goldman Sachs are still predicting the Bank of England will cut interest rates this year.
In their baseline forecast, Goldman economists see the next rate cut in July, followed by further quarter-point cuts in November and February, bringing Bank rate down to 3%.
That’s at odds with the money markets, which are indicating rates will rise back to 4%, from 3.75% today, next year.
Like pretty much everyone else in the City, it seems, Goldman also expect the Bank of England to hold Bank Rate unchanged at Thursday’s meeting.
They predict a 7-2 vote split – with policymakers Swati Dhingra and Alan Taylor preferring a 25bp rate reduction.
Goldman predict:
The minutes will probably acknowledge that the latest energy futures prices suggest that headline inflation is likely to remain above target for longer than previously expected, while stressing that the path ahead is highly unpredictable. We think that the Committee will indicate that it is alert to the possibility of second-round effects and will likely assess that the risk of persistence in underlying inflation has increased. That said, we expect the minutes to reiterate that risks remain two-sided given continued labour market weakness.
We expect the Committee to refrain from offering a strong steer on the near-term policy outlook, noting that in the current context of elevated uncertainty it will decide the appropriate degree of restriction at each meeting. But we think that the guidance will indicate that additional policy easing remains likely if energy prices fall back.
Updated
Shares in airlines are dropping this morning, as the rising oil prices pushes up their fuel costs.
British Airways’ parent company, IAG, and budget airline easyJet are both down 2%, among the top risers on the FTSE 100 index.
Wizz Air are the top faller on the FTSE 250 index of medium-sized firms, down 4%.
UK house asking prices rising this month despite fears of higher rates
The Iran crisis doesn’t seem to have caused a slump in the UK housing market, yet anyway.
Rightmove, the property portal, reported this morning that average new seller asking prices rose by 0.8% ( or £3,023) in March to £371,042.
That’s in line with typical moves this time of year, even though buyers’ hopes of cuts to interest rates have faded this month.
Rightmove also reports that the number of homes for sale remains at an eleven‑year high for this time of year, limiting more significant price growth. That means sellers need to price more competitively to attract buyer interest.
Seller denial and a dogged optimism for a bullish spring market lingered in this month @rightmove HPI. Asking prices rose 0.8% making the average house price on this index £371,042 in March. The issue for sellers is the number of homes for sale is at an eleven‑year high for this… pic.twitter.com/4k0XQS27lh
— Emma Fildes (@emmafildes) March 16, 2026
Concern is growing that the disruption to shipping through the strait of Hormuz will hurt fertiliser shipments, leading to food shortages and higher prices.
EU foreign policy chief Kaja Kallas told reporters in Brussels this morning that the closure of the strait was “really dangerous” for energy supplies to Asia but was also a problem for the production of fertilisers, Reuters reports.
She warned:
“And if there is a lack of fertilisers this year, there’s going to be also food deprivation next year.”
Svein Tore Holsether, the chief executive of Norway’s Yara International – a giant fertiliser producer – has warned that crop yields could be badly hit if the war continues for an extended period.
Back in the stock market, Shell (+1.3%) has joined BP as one of the top risers on the FTSE 100 this morning.
They’re expected to profit from the Iranian war; Goldman Sachs predicted the two oil majors will collectively earn an extra £5bn in profit this year from the surge in crude prices in the Iranian war.
Starmer to announce support for households hit by energy price spike
Keir Starmer is expected to announce tens of millions of pounds’ worth of support for Britons hit by a spike in energy prices as a result of the Iran war.
The prime minister will lay out the plans during a press conference in Downing Street on Monday, during which he will also take aim at some suppliers of heating oil for price gouging.
The support package is understood mainly to be targeted at people who use heating oil to warm their homes, many of whom live in rural areas of Northern Ireland where the prime minister visited last week. More here.
Bloomberg: Pakistan oil tanker transits Hormuz
A tanker laden with crude oil appears to have cleared the Strait of Hormuz and is now sailing to Pakistan, Bloomberg are reporting.
This makes The Karachi, controlled by Pakistan’s National Shipping Corp., the latest vessel to leave the Persian Gulf since the Iranian war began.
By this morning, the Pakistan-flagged Aframax was seen in the waters off Oman’s Sohar, they report, saying:
The 2022-built Karachi made its way across Hormuz and around Iran’s Larak Island, the vessel-tracking data show. It then proceeded eastbound close to Iran’s coastline, before leaving the strait Sunday evening. Other ships leaving the strait also appear to have taken a route on the Iranian side of Hormuz.
The Karachi most recently loaded crude in the United Arab Emirates, according to ship-tracking data. Draft readings indicate that the ship isn’t fully laden.
This map, from my LSEG terminal, appears to confirm The Karachi travelled through the strait last weekend:
FTSE 100 opens higher
The London stock market has opened with gains.
The FTSE 100 index of blue-chip shares is up 33 points at the open to 10,293, a rise of 0.33%.
Retail group Kingfisher (+1.75%) are the top riser, followed by oil giant BP (+1.7%).
The pound is creeping up from the three-month low hit at the end of last week.
Sterling has gained 0.2 of a cent to $1.324 this morning, after dropping on Friday after the economy failed to grow in January.
Kathleen Brooks, research director at XTB, says:
The pound is coming under pressure as the dollar resurgence continues, however, it was not the weakest performer in the G10 even though UK GDP at the start of the year showed no growth.
Although inflation remains a key risk for the UK economy, the rising unemployment rate suggests that the UK economy is not operating at full employment, which may tilt the BOE away from rate hikes this year and towards remaining on hold instead. If the sharp rise in UK Gilt yields ease, then the pound may take a breather from its recent sell off.
Mortgage shelf-life nosedives amid market uncertainty
The average shelf-life of a UK mortgage has shrivelled, even before the surge in energy price hammered hopes for interest rate cuts.
Data provider Moneyfacts has calculated that the average shelf-life of a mortgage fell to 14 days, on the first of March, the lowest since August 2023.
In “a complete turn-around from the seasonal slowdown during January”, the market is now entering a period of uncertainty amid global pressures, Moneyfacts reports.
Lenders have been scrambling to reprice mortgage products this month, as the financial markets have ripped up their previous forecasts for several cuts to UK interest rates this year.
This pushed average mortgage rates in the UK past 5% last week.
Lenders may well pull more products until the future path of interest rates becomes clearer, Moneyfacts predicts.
The Bank of England is now widely expected to leave interest rates on hold on Thursday, with the money markets fully pricing in a rise in a year’s time.
Rachel Springall, finance expert at Moneyfacts, says:
“Borrowers looking to refinance would be wise to act quickly to secure a new deal, as the significant push in mortgage activity during February has led to a significant fall in the average shelf-life of a mortgage to just 14 days.
This is a complete contrast to the notable seasonal slowdown in activity during January. However, since this data was captured, there has been a notable shift in swap rates, amid the unrest seen in the Middle East. It is worth noting that the average shelf-life of a mortgage has not been this low (14 days) for over two years, last lower for August 2023, at 13 days. This was just one month after a record low of 12 days recorded for July 2023.
Introduction: Oil higher after attack on Kharg Island
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
For the third Monday running, the oil price is rising as the Iranian war threatens to hurt the global economy.
Brent crude, the international benchmark, has gained around 2.6% so far today to $105.80 a barrel, further above the $100/barrel it crossed last week for the first time since 2022. US crude is up 1.5% at just over $100 a barrel.
That’s beneath the overnight highs, as Brent had been as high as $106.50/bbl when markets reopened last night.
Crude prices are rising after the US struck Iran’s vital Kharg Island oil hub last weekend, through which 90% of the country’s oil exports typically flow.
With the strait of Hormuz badly disrupted, Donald Trump is now urging other countries to send ships to help reopen it, waggling the threat that “it will be very bad for the future of Nato,” if they don’t.
Iran’s Foreign Minister, though, has denied that the strait is closed – insisting it is open to all nations except the United States, Israel, and their allies.
That has cooled some of the anxiety in the oil market, as Tony Sycamore, market analyst at IG, explains:
This context is crucial: China and India alone account for approximately 50% of all oil that normally transits the Strait of Hormuz.
Additionally, Saudi Arabia’s East-West pipeline is rerouting 7 million barrels per day, bypassing Hormuz entirely, with reports indicating tankers are lined up ready to collect this redirected cargo.
The agenda
9.30am GMT: UK’s ONS to update inflation basket
12.30pm GMT: NY Empire State Manufacturing Index for March
