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Thanks for following our coverage of the market reaction to the US-Iran war.
UK and European stock markets have fallen, with Wall Street also declining as there remains no deal on restarting shipping through the Strait of Hormuz.
Oil prices were last up 3.5pc at more than $93 a barrel, while government borrowing costs were a touch higher.
You can stay up to date with any fresh developments here.
US stocks mixed at the open
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Wall Street’s main indexes were muted at the opening bell after a record rally last week.
The Dow Jones Industrial Average was little changed at 49,443.86 as escalating US-Iran tensions threatened the fragile ceasefire.
The S&P 500 fell 0.2pc to 7,114.88, while the Nasdaq Composite declined by 0.1pc to 24,434.37.
Iran ‘positively’ reviewing US peace talks
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A senior Iranian official has said that Tehran is “positively” reviewing its participation in potential peace talks with the United States but that no final decision has been made.
The Iranian official said positive efforts are underway by mediator Pakistan to end the US blockade and to ensure Iran’s participation in the peace talks.
A Pakistan source involved in the talks said the two-week ceasefire ends on April 22 at 8pm EST, which is around 1am UK time.
Labour donor urges Miliband to scrap heat pump handouts to fund defence
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One of Labour’s biggest donors has urged Ed Miliband to scrap billions of pounds in heat pump handouts to boost defence spending.
Dale Vince, the green energy tycoon, has called on the Energy Secretary to redistribute the £2.7bn earmarked for heat pump installation grants to “buy the bombs we need”.
Under the Government’s Boiler Upgrade Scheme, households can claim up to £7,500 for a heat pump. This forms part of Mr Miliband’s goal of installing 450,000 heat pumps a year from 2030.
Kuwait declares force majeure on oil shipments
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Kuwait has declared force majeure on shipments of oil products as the blockade of the Strait of Hormuz leaves it unable to meet its obligations.
Force majeure is a contractual clause that frees parties from liability when an extraordinary, unforeseeable event that is beyond their control stops them fulfilling their obligations.
State-run Kuwait Petroleum told customers on Friday it was invoking the clause to allow it to miss deliveries, according to Bloomberg News.
Iran power vacuum causing market turmoil, says Aberdeen
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A power vacuum at the heart of the Iranian government could be derailing efforts to reach a fresh ceasefire in the Iran war, according to Aberdeen.
Lizzy Galbraith, an economist at the investment group, said: “With a high percentage of key leadership killed, it is unclear whether any single figure has the authority and capability to reach an agreement with the US that all parties will follow.”
Oil prices have jumped around 5pc and stocks have fallen as doubts grow about peace talks between the US and Iran in Pakistan before the ceasefire is due to end on Tuesday.
Ms Galbraith added: “It may also be that both sides are increasing their leverage ahead of the next round of talks while still fundamentally in search of a deal.
“President Donald Trump has reiterated his threat of striking Iranian power plants and bridges should the ceasefire break down.
“The Iranian leadership seems to be treating this as a credible threat it wants to avoid triggering. And Iran has genuine strategic reasons to avoid a resumption of military strikes and end the US’s “counter-embargo”.
“At the same time, Trump is probably still in search of an off ramp. The war remains unpopular at home, and any stabilisation in his approval rating ahead of the midterms probably turns on bringing gasoline prices down.
“Indeed, it did seem that genuine progress was being made in the talks and it is possible to sketch out a credible landing zone.”
US stocks poised for slump even as Trump mulls lifting blockade
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US stocks were poised to fall at the opening bell even after reports that Donald Trump will consider lifting America’s blockade of Iranian ports to overcome the deadlock in peace talks.
The S&P 500 and Nasdaq both hit record highs on Friday and their biggest weekly jumps since May after Iran announced the reopening of the Strait of Hormuz.
However, traders have become nervous after a weekend that saw Tehran reimpose its closure of the waterway and the US seize an Iranian flagged vessel.
Brent crude remains 5pc higher today and US stocks are on track to fall, with the Dow Jones Industrial Average down 0.6pc in premarket trading, and the S&P 500 and Nasdaq 100 both down 0.5pc.
This is despite the US president telling Field Marshal Asim Munir, Pakistan’s army chief, during a phone call that he would weigh up his suggestion of ending the naval operation in the Arabian Sea, according to Reuters.
Field Marshal Munir has been one of the principal mediators in the negotiations between the two countries, maintaining good relations with both American and Iranian officials.
Netherlands announces £827m support plan over Iran war
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The Dutch government has said it would allocate over €950m (£827m) to help compensate businesses and individuals for the surge in petrol prices since the outbreak of war between the US and Iran.
“Energy prices are expected to remain high for the time being, even if the conflict in the Middle East should end soon,” the government said.
“Households and businesses are already feeling the impact,” it said, adding that they would be the priority for a first package of measures worth €627m.
A further €340ms will be unlocked by cuts to business charges, to be financed by higher taxes on other items, in particular alcohol.
Pound steady despite pressure on Starmer
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The value of the pound held firm against the dollar despite the turbulence from the Iran war and pressure on Sir Keir Starmer.
Sterling was little changed at $1.352, despite the chaotic weekend initially pushing up the US currency, which is considered a safe haven in times of turmoil.
The pound edged down 0.1pc against the euro to €1.148 as the Prime Minister prepares to address the Commons about the Mandelson scandal.
Sir Keir is facing pressure to resign after appointing the disgraced peer despite him failing security vetting.
Enrique Díaz-Alvarez, chief economist at payments firm Ebury, said: “Domestic political risk in the UK is emerging as the third factor driving sterling, together with war headlines and macroeconomic data.
He added: “The fallout from the Mandelson affair and its impact in further weakening Starmer’s leadership may compound worries about the May elections and the possibility of a turn to the Left, which would likely imply higher government spending.”
South Korea braces for an end to modern life as we know it
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The demilitarised zone (DMZ) that divides North and South Korea is heavy on reminders of the Cold War conflict between the two countries more than 70 years ago.
One much-displayed image of the Korean peninsula by night encapsulates the contrast between the South’s transformation into a technological, manufacturing and cultural power and a North that remains in the grip of a despotic, backward dictatorship.
South Koreans have long regarded the image as evidence of their ultimate victory over the North and its belligerent leadership, and of the wider triumph of capitalism and democracy.
However, in a matter of weeks, the lights may also begin to go out in Seoul, Busan and other towns and cities across South Korea as a result of the Iran war.
Petrol prices edge lower
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Petrol prices edged down over the weekend amid the first tentative hopes of a US-Iran peace deal.
RAC said petrol prices have fallen by half a penny since peaking last Wednesday, with diesel down by 1.06p.
It leaves the average price of unleaded across Britain at 157.66p, with diesel costing 190.48p on Monday.
Head of policy Simon Williams said the drop in prices “ought to accelerate this week as more retailers buy in new supply at lower costs”.
Separate data from the AA said Northern Ireland is the first part of the country to show a fall in pump prices, dropping by less than half a penny to 153.1p.
Spokesman Luke Bosdet said: “It is now a fortnight since wholesale costs for petrol and diesel started to fall.
“Although they have yo-yoed with the twists and turns in negotiations to end the Middle East conflict, there are consistent and very clear reductions in wholesale prices that now need to be passed on at the pump.”
He added: “We notice that in Northern Ireland, where CMA price data is the current source of price averages, it comes from supermarkets. That means the superstores have been cutting their prices, something they could do elsewhere in the UK and quickly.”
UK stocks slump over Iran ceasefire doubts
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The UK’s main stock indexes have fallen over fears that the US-Iran ceasefire could collapse.
The FTSE 100 was down 0.6pc and the domestically focused FTSE 250 was down 1.2pc after the US seized an Iranian cargo ship at the weekend.
Traffic through the Strait of Hormuz remained largely halted, sending crude prices 5pc higher.
HSBC was the biggest drag on the FTSE 100, dropping by 1.3pc in a broad sell-off of banks, which are seen as a bellwether for the health of th economy. Barclays was down 2.3pc and NatWest fell 2.5pc.
Copper miner Antofagasta suffered the biggest drop, falling by 5pc, while precious metal miners Fresnillo and Hochschild fell about 2pc, tracking a decline in gold and silver prices.
British Airways owner IAG was down 2.8pc as crude prices jumped, while energy giants BP and Shell were the best performers, up 2.8pc and 2.5pc, respectively.
Shares of luxury handbag maker Mulberry climbed 7.5pc after it reported higher annual revenue.
Debt worries mount for UK households
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Debt worries mounted this month and people’s confidence in their job security declined as the Iran war puts strain on the economy.
Household worries about debt intensified as levels rose modestly in April, but at a faster pace than in March, according to the S&P Global UK Consumer Sentiment Index.
Families also reported a greater need for unsecured loans.
People were also downbeat about the jobs market, saying they felt insecure in their roles for a second straight month and to the greatest degree in just over three years.
The media, culture and entertainment sector suffered the highest levels of insecurity.
Household savings also depleted rapidly this month, with the pace of reduction the most pronounced for a year, the survey showed.
Iran war sends household confidence to three-year low
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Households have become the most worried about their financial future in three years as the Iran war threatens to drive up inflation.
Families are the most concerned about their financial wellbeing since July 2023, according to the S&P Global UK Consumer Sentiment Index.
The survey of 1,500 UK households showed people were more pessimistic about the year ahead as the conflict in the Middle East created “growing unease”.
Maryam Baluch, economist at S&P Global, said households were expecting higher interest rates from the Bank of England to combat an expected surge in inflation.
The war has driven up the price of petrol by 25p a litre, with diesel close to 50p per litre above pre-war levels.
Money markets indicate the Bank of England will raise interest rates at least once this year as a result of the conflict. Traders had expected to cuts before the war broke out.
Ms Baluch said: “Increased energy-market disruption raises the odds of further spikes in fuel and utility bills, with headwinds keeping near-term inflation stickier than policymakers would like.”
She added: “The strain on finances and an uncertain central bank policy outlook is showing up in consumer behaviour as households bear down on spending, particularly on big-ticket items, while running down savings at the fastest pace in a year.
“Debt undertakings, too, edged higher with the need for loans growing to the greatest extent in over two-and-a-half years.”
Borrowing costs rise as US-Iran ceasefire deadline looms
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The cost of government borrowing climbed around the world as the deadline to extend the US-Iran ceasefire looms this week.
The yield on government bonds – the return promised to buyers of sovereign debt – has pushed higher as investors demand greater protection from the risk of a deepening conflict in the Middle East.
The yield on 10-year gilts, as UK bonds are known, has risen from 4.12pc to 4.16pc as the US seizure of an Iranian-flagged cargo ship put the latest scheduled peace talks in jeopardy.
The US and Iran were due to hold further talks in Pakistan but it is unclear whether the negotiations will go ahead as a result of the incident.
UK borrowing costs rose at a slower pace than major counterparts in Europe, suggesting doubts over the future of Sir Keir Starmer were not yet being factored in by investors.
The Prime Minister will battle to save his job in Parliament on Monday by setting out further details of the “unforgivable” error by officials in not telling him Peter Mandelson had failed his security vetting.
Oil and gas prices jump in US-Iran stand-off
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The price of oil and gas has risen as the US and Iran raise doubts over how quickly shipping can return to the Strait of Hormuz.
Brent crude, the international standard, was up 5.6pc at more than $95 a barrel, while US benchmark crude gained 6.3pc to more than $89.
European wholesale gas was last up 5.4pc to nearly €41 per megawatt hour after Donald Trump announced the US had seized an Iranian cargo vessel.
Energy prices had declined on Friday after Iran announced the Strait of Hormuz was reopening, only to rebound on Monday after a chaotic weekend.
However, the moves in oil and gas prices were at a much smaller scale than the wild jumps at the start of the war.
Christian Gattiker, head of research at Julius Baer, said the markets were still being dominated by headlines about the Iran war – but to a lesser degree.
He said: “Compared to a month ago, its grip on markets has clearly loosened.
“It would likely take a renewed and significant escalation to return it to the same level of dominance that previously dictated sentiment almost single-handedly.”
China raises concerns over US seizure of Iran ship
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China has expressed concern over the “forced interception” of an Iranian-flagged cargo ship by the US Navy.
A Chinese foreign ministry spokesman said: “The situation in the Strait of Hormuz is sensitive and complicated.”
He urged against further escalation in the conflict to “create the necessary conditions for normal transit through the strait to resume”.
Beijing on Monday also called for the all parties in the war to “continue to maintain the momentum of the ceasefire and negotiations”.
“Now that a window for peace has opened, favourable conditions should be created to bring the war to an end as soon as possible,” he said.
European shares fall as ceasefire in doubt
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European shares declined after the US seized an Iranian cargo ship that tried to run its blockade and Tehran vowed to retaliate.
The pan-European Stoxx 600 index was down 0.9pc as the US-Iran ceasefire looked fragile ahead of its expiry on Tuesday.
Mr Trump said US representatives would travel to Pakistan for talks on Monday.
The Cac 40 in Paris dropped by 1.2pc and the Dax in Frankfurt sank by 1.3pc in a sharp reversal from Friday, when Iran declared the Strait of Hormuz open. It reversed course just a day later and reclosed the waterway.
The travel and leisure sector led the declines, falling by 2pc. Banks and motoring stocks dropped 1.8pc each.
Chris Weston at Pepperstone said traders were assessing “whether the ceasefire can be salvaged through this week’s diplomatic talks, with recalibration on the probability of military escalation”.
Energy crisis to run until winter, warns supermarket boss
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The global energy crisis caused by the Middle East war could last until the winter, the head of French supermarket chain Leclerc said.
Michel-Edouard Leclerc, the company’s executive chairman, told Europe 1 radio and CNews TV: “We have up to six months at the very least, and perhaps going through to the coming winter, of an energy crisis.”
M&C Saatchi warns of blow from Iran war
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Advertising agency M&C Saatchi has warned it expects the Iran war to “significantly impact” parts of its business.
The company, whose clients include Amazon, Adidas and Burberry, revealed revenues fell 9.2pc last year to £210m while operating profits sank by 54.7pc to £10.2m.
Shares have fallen 15pc this year after issuing a profit warning towards the end of 2025, having been buffeted by scandals and hostile takeover bids in recent years.
In March, its chief executive Zaid Al-Qassab stepped down after less than two years in the job.
In its annual results on Monday, M&C Saatchi told shareholders it is aiming for net revenue growth “in line with market estimates” this year, supported by growth in the US and Europe.
It warned: “Macroeconomic challenges remain, while the conflict in the Middle East is likely to significantly impact our sport and entertainment and consumer-facing business.”
Shares dropped 1.3pc in early trading.
Executive chairman Dame Heather Rabbatts said: “Whilst we expect continued market uncertainty, we are confident in targeting net revenue growth and operating profit growth in 2026, in line with current market expectations.”
M&C Saatchi has longstanding ties to the Conservative Party. It was founded by Maurice and Charles Saatchi, the brothers behind the famous “Labour Isn’t Working” campaign, following a split from their previous agency in 1995.
UK stocks fall as Hormuz shipping in doubt
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The UK’s stock markets fell at the start of the week as doubts remain about whether shipping will be able to resume soon through the Strait of Hormuz.
The FTSE 100 opened down 0.4pc to 10,626.81 while the mid-cap FTSE 250 slumped by 0.8pc to 23,029.98.
Gas surges as US Navy seizes Iran ship
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The price of wholesale gas jumped after the chaotic weekend that has ratcheted up tensions in the Middle East.
Europe’s benchmark contract jumped as much as 10.9pc after Iran reimposed its closure of the Strait of Hormuz and the US set up a naval blockade.
Dutch TTF, as the contract is known, was last trading at €41 per megawatt hour after the US navy seized an Iranian vessel on Sunday.
It had dropped below €40 on Friday for the first time since the outbreak of the war after Iran said it would reopen the Strait of Hormuz. It announced it was reclosing the waterway again on Saturday.
FTSE 100 poised for slump as doubts grow over shipping
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The FTSE 100 and other European markets were on track to fall at the open as the renewed tensions raised doubts about shipping returning to the Strait of Hormuz.
The UK’s flagship market was down 0.4pc in premarket trading, while the Cac 40 in France and Dax in Germany were down 1.3pc and 1.4pc, respectively.
Traders are betting that there is less chance of shipping returning to normal in the Strait of Hormuz after the weekend’s headlines.
Polymarket had priced the probability of Strait traffic returning to normal by the end of May as high as 84pc on Friday.
That has now fallen back to around 63pc, close to last Thursday’s level, but still well above the 37pc probability priced this time last week.
Jim Reid, an analyst at Deutsche Bank, said: “As the war in Iran enters its eighth week, recent developments can be framed in two ways: either five steps forward towards peace and three back (seems more apt than three and two), or as evidence that the two sides remain far enough apart that a lasting deal will be extremely hard to achieve and markets have become far too optimistic.
“I lean more towards the former, but the comparison with recent history is uncomfortable.
“Remember the 10pc S&P 500 rally in the early weeks of the war in Ukraine, when hopes briefly grew of an early negotiated settlement, only to be disappointed. That episode is a clear warning sign.”
Good morning
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Thanks for joining me. Oil jumped after the US seized an Iranian cargo ship that tried to bypass an American blockade in the Gulf. Here is what you need to know.
5 things to start your day
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4) The AI revolution will change the world’s economy forever | Automation replacing services workers could slash costs and push down prices across industrialised nations, writes Roger Bootle
5) Bezos’s rocket catches up with Musk’s in space rivalry | Blue Origin booster touches down on floating landing pad in Atlantic after successful reuse
What happened overnight
Oil prices climbed more than 5pc as a standoff between Iran and the US prevented tankers from using the Strait of Hormuz.
The Persian Gulf waterway was closed again after Iran reversed a decision to reopen the strait and President Donald Trump said a U.S. Navy blockade of Iranian ports remains in effect.
Brent crude, the international standard, was up 5.1pc at $95.03 a barrel.
Despite renewed doubts about how soon ships will again transport the vast amounts oil the world gets from the Middle East, share prices were mostly higher in Asia.
In Tokyo, the Nikkei 225 gained 0.7pc to 58,867.10, while South Korea’s Kospi was up 0.6pc to 6,228.39.
Hong Kong’s Hang Seng added 0.7pc to 26,353.46 and the Shanghai Composite index advanced 0.6pc to 4,077.55.
Australia’s S&P/ASX 200 was up 0.1pc to 8,953.30, while in Taiwan, the Taiex rose 0.4pc.