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Thanks for following our coverage of the ongoing conflict in the Middle East and Donald Trump’s suggestion the fighting could end soon.
You can keep up to date with the latest here.
Wall Street rallies as Trump signals war could end soon
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America’s leading stock indexes all rose on Wednesday as traders grow increasingly optimistic about a possible end to the war in Iran.
The S&P 500 index of America’s biggest blue-chip stocks increased by more than 1pc in the morning trading session, while the tech-heavy Nasdaq-100 index gained almost 1.6pc.
The Dow Jones Industrial Average also increased by almost 1pc in the morning trading session on the New York stock exchange.
The Wall Street rally came as oil prices fell, amid optimism the fighting could soon end in the Middle East.
FTSE-100 has best day in a year
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Britain’s blue-chip index has had its best day in almost a year after Donald Trump suggested the US would end the war in Iran “very soon”.
The FTSE 100 ended the day 1.7pc higher on Wednesday, signalling a major rebound from the sharp slump in March.
It marked the index’s biggest gain since April 14 2025, when the FTSE 100 rebounded 2.1pc after a downturn caused by the Liberation Day tariffs.
Wednesday’s jump comes after the FTSE 100 index fell by 5.6pc in March. The slump had been caused by fears over disruption to energy markets from the war in Iran and the risk of it fuelling inflation.
On Wednesday, the US president signalled he was planning to leave Iran in the coming weeks, adding that Tehran “doesn’t have to make a deal.”
Mr Trump said: “Iran’s New Regime President, much less radicalised and far more intelligent than his predecessors, has just asked the United States of America for a CEASEFIRE!”
Rachel Reeves could cut the 5pc fuel levy at any point, Telegraph readers say
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Rachel Reeves support for drilling in the North Sea have sparked a strong reaction from Telegraph readers.
Here is a selection of views from the comment section below and you can join the debate here.
Shell shares sink as traders bet on end of Iran war
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Energy giant Shell has suffered its biggest slump in a year after Donald Trump said Iran had asked for a ceasefire in the Middle East conflict.
The oil and gas producer, which is one of the biggest companies on the FTSE 100, fell by more than 4pc on Wednesday.
It comes a day after Shell completed its best month since November 2020, rising by 16.6pc as the Iran war drove up oil and gas prices.
BP fell more sharply on Wednesday, dropping by 5.3pc.
Energy prices to be ‘economic drag’ even if war ends soon
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Global economies will still face an “economic drag” if the war in Iran ends quickly, economists have said.
Capital Economics warned the effects of the Iran war will “persist” on markets even if the conflict is ended soon.
Stocks and bonds have surged and oil prices have fallen after Donald Trump said he wanted the fighting to be over in “two to three weeks”.
However, it is “not guaranteed” that markets would reach levels before the conflict, according to Capital Economics.
“For a start, energy prices would probably remain high,” said economist Thomas Mathews, who added that such a scenario would mean major central banks would be unlikely to cut interest rates this year.
“Higher energy prices would remain an economic drag, which would contribute to keeping major equity indices from immediately returning to their previous highs,” he added.
Reopening Hormuz ‘going to take time’
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The price of oil has fallen nearly 3pc over hopes of an impending end to the Iran war.
However, analysts warn that ramping up supplies of goods usually carried to the world through the Strait of Hormuz will take at least three to six months.
June Goh of Sparta Energy has laid out how long it will take various industries to get up and running should the key waterway be reopened unconditionally at the end of the Middle East conflict.
— June Goh (@JuneGoh_Sparta) April 1, 2026How does the reopening of Straits of Hormuz look like?
I presented this to my clients last week. Logistics will be messy. Confidence needs to be rebuild. Unconditional is the word.
It's going to take time, guys. Don't hold your breath.#oott pic.twitter.com/NGQmdNVAKK
Reeves: Treasury windfall from Iran war ‘for the birds’
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Rachel Reeves dismissed suggestions that the Treasury was enjoying a windfall as a result of soaring oil and gas prices during the Iran war.
The Chancellor said the idea of a windfall from the conflict was “for the birds” after analysis suggested that the Treasury could bring in an extra £8bn if fuel prices remained at their current levels for the coming year.
Motorists have been hit with higher petrol and diesel prices as a result of the Middle East war, which has pushed up the price of oil.
Asked by the BBC if the conflict had handed the Treasury an extra £20m a day, Ms Reeves said: “Well, let’s be clear, since Trump started this war, which we disagree with, the costs of borrowing for government have gone through the roof.
“The revenues that we’re likely to get through on income tax and capital gains tax are likely to come down.”
She added: “The idea that there’s any windfall coming to the Treasury. I mean, that’s just for the birds.”
Wall Street jumps as Trump says Iran asked for ceasefire
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US stocks leapt again after Donald Trump said Iran had asked for a ceasefire to end the war in the Middle East.
The S&P 500 rose 0.7pc to 6,577.08 at the open in New York after logging its best day in nearly a year on Tuesday amid growing hopes that the conflict is nearing an end.
The Dow Jones Industrial Average rose 0.7pc to 46,667.18 after the US president said he would only consider a ceasefire if the Strait of Hormuz was reopened.
The tech-heavy Nasdaq Composite leapt by 1.2pc to 21,847.23.
Poll: What do you think of Starmer’s push for closer relationship with EU?
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Sir Keir Starmer said Britain must get closer to the EU after Donald Trump warned he was considering pulling the US out of Nato.
The Prime Minister said it was “increasingly clear” that Britain required closer ties with Europe as he admitted the US president’s war in Iran would affect the UK, with energy bills expected to jump over summer.
We want to know what you think of the plan in our poll below.
In an address to the nation, Sir Keir said: “As the world continues down this volatile path our long term national interest requires closer partnership with our allies in Europe and with the European Union.”
Britain has aligned more closely with the EU since Labour came to power, with Sir Keir using his speech to claim that “Brexit did deep damage to our economy”.
He also defended Nato after President Trump called the military alliance a “paper tiger” in an interview with The Telegraph, criticising it for its failure to join his war in the Middle East.
Asked if he would reconsider the US’s membership of the alliance, the US president said: “Oh yes, I would say [it’s] beyond reconsideration. I was never swayed by Nato. I always knew they were a paper tiger, and Putin knows that too, by the way.”
Sir Keir said Nato was “the single most effective military alliance the world has ever seen”, adding he would act in the British national interest “whatever the pressure on me and others, whatever the noise”.
Reeves ‘very happy’ to see North Sea drilling
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Rachel Reeves said she was in favour of drilling in the North Sea in a sign of friction between the Chancellor and Energy Secretary Ed Miliband.
Ms Reeves said “there are a couple of decisions that need to be made” on new oil fields, adding she was “very happy” to see drilling going ahead given it would “create jobs and tax revenue”.
The decision on whether to award licences for the Rosebank oil field and the Jackdaw gas field sits with Mr Miliband, who has championed the switch to renewables.
The Chancellor said the Government had removed restrictions on drilling adjacent fields in the North Sea.
Asked by BBC Radio 2’s Jeremy Vine if she liked drilling in the North Sea, she said: “I’m very happy that we are.”
She added: “If we’re going to get ourselves off of this roller coaster of gas and oil prices, of course, we want to move to something what we have control over.
“And even if we drilled every bit of oil and gas out of the North Sea, we wouldn’t be able to set the price of it – and it’s the price that’s going up at the moment – it wouldn’t affect the price of the pumps.
“But it would, of course, create jobs and tax revenue, and that is why, exactly, we continue to support oil and gas for decades to come.
“But this is an important point, because, look, we had Russia invading Ukraine, and that disrupted and we put sanctions on Russia, rightly so. We have now got the disruption in the Middle East, and it’s hard to get the oil and gas out of the Strait of Hormuz, which is pushing up prices. It does show that we have got to take control of our own energy supplies here in Britain.”
Tice lambasts ‘absurd’ plan for closer EU ties
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Richard Tice has called Sir Keir Starmer’s comments about closer security and economic ties with the European Union “absurd”.
The Reform UK deputy leader called the EU a “failing economic bloc” which he claimed had also failed to adequately invest in defence in recent years.
He said on X: “Starmer’s ludicrous suggestion to get closer to the EU, a failing economic bloc that has also a long track record of failing to invest in defence.
“Let’s remember the EU became way too reliant on Russia for gas so their judgement is not to be trusted. We must use all our own energy treasure of oil and gas. We must invest in our own sovereign capabilities.”
— Richard Tice MP 🇬🇧 (@TiceRichard) April 1, 2026ABSURD
Starmer's ludicrous suggestion to get closer to the EU, a failing economic bloc that has also a long track record of failing to invest in defence.
Let's remember the EU became way too reliant on Russia for gas so their judgement is not to be trusted
We must use all our…
Trump: Iran wants ceasefire
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Donald Trump said he would only consider a ceasefire in Iran when the Strait of Hormuz is reopened in an apparent about turn on his indications he could end the conflict without a deal on the waterway.
The US president posted on Truth Social that Tehran had requested an end to strikes, which he said he would only entertain once the trade route is “open, free and clear”.
He wrote: “Iran’s New Regime President, much less Radicalized and far more intelligent than his predecessors, has just asked the United States of America for a CEASEFIRE!
“We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!”
Bailey says markets ‘getting ahead of themselves’ on rate rises
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The Governor of the Bank of England poured doubt on market bets that interest rates will be raised twice this year in response to the Iran war.
Andrew Bailey said policymakers would need to focus on the risks to growth and jobs as well as inflation from the Middle East conflict.
Traders last month priced in as many as four interest rate rises later this year as the Iran war threatens to drive up inflation.
However, money markets now indicate there will be around two rate rises.
“We will have to, obviously, act on monetary policy if we think it’s appropriate to do so,” Mr Bailey told Reuters.
“But it strikes me, and it still strikes me today, that the most important thing to do is to tackle the source of the shock.
“(The market)’s still pricing us to raise rates. I would still say that is a judgment markets have to make but I think they’re getting ahead of themselves.”
The Bank of England kept interest rates on hold at its last meeting at 3.75pc.
Ryanair warns quarter of fuel supplies ‘at risk’ from Iran war
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Ryanair boss Michael O’Leary has warned that up to a quarter of his airline’s fuel supplies could be at risk in the coming months as a result of the war in Iran.
Mr O’Leary said the aviation industry was grappling with a “dramatic” rise in oil prices, which have more than doubled since the war started at the end of February.
But he said jet fuel supplies posed a “more immediate concern”, depending on how long the conflict continues.
Speaking to Sky News, the Ryanair boss said: “We don’t expect any disruptions to supply until about early May, but if the war continues we do run the risk of supply disruptions in Europe in May and June.”
Asked how severe the shortages could be, Mr O’Leary said there was a “reasonable risk” that as much as 25pc of his airline’s fuel supplies could be at risk in May and June if the war continues.
He added: “Obviously we hope the war will finish sooner than that and the risk to supply will be eliminated.”
Mr O’Leary said Ryanair was “reasonably well-hedged” against rising fuel prices as it had locked in prices for around 80pc of its fuel up until March next year.
But he said prices for the remaining 20pc had almost doubled, raising concerns for airlines across the industry.
Thousands of flights across the world have been cancelled across the world in recent weeks due to rising fuel prices, compounding disruption caused by the closure of key travel hubs in the Middle East. Passengers are also facing higher airfares as a result of the surging costs.
Wall Street poised for fresh surge as global stocks rally
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US stocks were on track to surge again after the S&P 500 recorded its best day in nearly a year.
Wall Street was poised for another rally after Donald Trump suggested the Iran war would be ended in “two to three weeks”.
The US president will address the nation from the White House at 2am UK time.
Stocks around the world have surged after the US president’s change of tone, with the FTSE 100, Cac 40 in France and Dax in Germany all up more than 2pc.
Asian markets rocketed even higher, with benchmarks in Japan and South Korea ending the day up more than 5pc and 8pc, respectively.
Oil prices fell but remained above $101 a barrel after Mr Trump suggested he would walk away from the conflict without a deal on the future of the Strait of Hormuz.
The waterway has been effectively closed since the start of the conflict, choking off around a fifth of the world’s oil and gas exports.
UBS analysts said: “While signs of a willingness to negotiate are positive, hurdles remain before an actual end to the conflict.
“A resumption of energy flows may take longer still.”
The S&P 500 and the Nasdaq posted their steepest monthly declines in a year during March, while the Dow logged its sharpest drop since September 2022.
However, the indexes ended the month on a positive note thanks to the president’s comments, with S&P 500 jumping at its steepest pace since last May.
In premarket trading, the Dow Jones Industrial Average was up 0.8pc, the S&P 500 had climbed 0.9pc and the Nasdaq 100 was up 1.2pc.
Britain risks financial crisis, Bank of England warns
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Britain risks a financial crisis that would leave households battling higher borrowing costs and soaring prices as a result of the war in Iran, the Bank of England has warned.
Policymakers said the conflict had already left an extra million people facing higher mortgage repayments after banks increased their rates.
Roughly 5.2 million borrowers, representing more than half of all mortgaged homeowners, now face higher payments by 2028, the Bank said. This is up from 3.9 million before the conflict began.
FTSE 100 rises at steepest pace in a year
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The FTSE 100 was on track for its best day in a year after Donald Trump signalled an impending end to the Iran war.
The UK’s benchmark index has surged by 2.1pc after the US president said the Iran war could be over in “two to three weeks”.
It is the FTSE 100’s best day since April last year, when markets rocketed after Mr Trump U-turned on the most extreme elements of his liberation day global tariffs.
HSBC was the biggest force pushing up the index, rising by 4.3pc. Major banks are considered a bellwether of economic growth.
Defence companies Rolls-Royce and Babcock enjoyed the sharpest rises, climbing by 6.5pc and 6.3pc, respectively, after Mr Trump told The Telegraph he was considering pulling out of Nato.
The mid-cap FTSE 250, which is more focused on the UK economy, rose 1.9pc.
Starmer ‘trying to reopen old wounds’ on Brexit
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Sir Keir Starmer is “trying to reopen the old wounds of the Brexit years” by seeking closer economic ties with the European Union, the Conservatives have said.
Dame Priti Patel accused the Prime Minister of being “desperate for someone or something to blame for the terrible failings he has overseen, and has his sights set on Brexit”.
The shadow foreign secretary said: “It’s his own Government that has sent the cost of living up, leaving families £1,000 worse off this year.
“Labour’s tax hikes and net-zero zealotry are causing misery for hardworking people while those on welfare get a bonus courtesy of Rachel Reeves.”
She added: “Rather than trying to reopen the old wounds of the Brexit years, Starmer should focus on fixing the mess he has created.”
Iran war sends business confidence to record low
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Confidence in the economy among British business leaders has plunged to a record low as they grapple with the fall-out from Donald Trump’s war in Iran.
The Institute of Directors (IoD) said its closely watched poll of business leaders’ optimism in the economy fell to its worst-ever level of -76 in March, down from -63 the previous month.
It suggests the outlook among businesses is even more dire than in the run-up to Rachel Reeves’s second Autumn Budget last year, when confidence fell to -74.
The latest drop in the Directors’ Economic Confidence Index comes as businesses were already reeling from big employer tax rises and minimum wage increases.
The IoD’s survey found that disruption caused by the war in the Middle East, now in its second month, was starting to weigh on businesses. Among all companies, 59pc reported a negative impact.
This figure is higher among manufacturers, where 69pc said they were worse off as a result of the conflict, according to the survey.
Anna Leach, chief economist at the IoD, said: “Impacts being reported include sharp increases in fuel and shipping costs, rising material prices – such as petrochemicals – and delivery delays.”
She added that many firms were delaying important decisions because of the turmoil, which has hammered financial markets.
It has also become more difficult to secure financing, with investors pulling out of deals, Ms Leach warned.
Macron heads to Japan in bid to reopen Hormuz
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Emmanuel Macron met Japanese prime minister Sanae Takaichi as he seeks to build ties to revive trade in the Middle East.
The French president was in Tokyo on Wednesday for talks on security and industrial cooperation.
The two leaders agreed to cooperate closely to help open up the Strait of Hormuz.
Starmer wants closer EU ties ‘to stop Reform’
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The Prime Minister aims to “stop Reform” by pushing Britain closer ties to Europe, according to Telegraph readers.
Here is a selection of views from the comment section below and you can join the debate here.
Starmer ‘allergic to action’, says Jenrick
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Robert Jenrick, Reform UK’s economy spokesman, criticised Sir Keir Starmer for a “non-statement” at this morning’s press conference.
He claimed the Prime Minister was “allergic to action” and said the Government should scrap the increase in fuel duty scheduled for September.
— Robert Jenrick (@RobertJenrick) April 1, 2026Is Keir Starmer allergic to action?
Another non-statement this morning.
Drill the North Sea. Scrap the fuel duty rise. Take VAT and the stealth levies off energy bills.
Pound rises as Starmer seeks closer EU ties
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The value of the pound rose as Sir Keir Starmer said he wanted Britain to have closer ties to Europe.
Sterling was up 0.2pc versus the single currency at €1.147 after the Prime Minister said he wanted stronger “co-operation on defence, security, energy, emissions and the economy”.
The pound jumped by 0.6pc against the dollar to tip over $1.33 as Donald Trump signalled he wanted the war in Iran to end in “two to three weeks”.
It meant investors switched out of the US currency, which is considered a safe haven in times of turmoil.
Starmer says Labour manifesto backed closer ties with EU
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The Prime Minister did not rule out Britain rejoining the single market as he said he was “ambitious” about seeking closer ties to the EU.
Sir Keir Starmer insisted that Labour’s manifesto commitments not to rejoin the single market or customs union remained.
However, he added: “We made it clear in the manifesto that we wanted a closer relationship with Europe, so that is perfectly consistent with our manifesto.”
He said: “I do think that we should strengthen our co-operation on defence, security, energy, emissions and the economy.
“And on the economy the steps we’ve taken so far have been in relation to the single market. I’m ambitious that we could do more in relation to the single market because I think that’s hugely in our economic interests.
“Obviously this is a matter of negotiation and discussion with the EU but the summit we had this year will not just be a stock take summit where we look at the 10 strands that we put in place last year.
“It will be a deliberate ambition on our part to go further than that and to cooperate more deeply including in the economic sphere.”
Analysis: Starmer announces meetings in response to Iran crisis
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Sir Keir Starmer appears to have announced no new measures being taken to respond to the war in Iran at his press conference this morning.
The Prime Minister himself admitted that the measures easing the cost of living, on energy bills, petrol and heating oil, were already being taken by the Government.
The only fresh announcements this morning have been that the UK will hold two meetings with allies about the diplomatic and political avenues to reopen the Strait of Hormuz.
But Sir Keir has sought to frame this as a demonstration of his political leadership, claiming that he has been working since well before the Iran war to stabilise Britain against global shocks.
He told journalists: “Some people may say, ‘This isn’t new, this was already planned’. To which I say, Yes, that is my point.
“Everything I’ve done in politics, certainly since the Ukraine war in 2022 is a response to this new and dangerous world.”
Starmer pushes for closer EU ties as Trump considers Nato exit
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Sir Keir Starmer has said he will act in the British national interest “whatever the pressure on me and others, whatever the noise”.
Asked about Donald Trump telling The Telegraph that he is considering pulling the US out of Nato, Sir Keir said: “Firstly, Nato is the single most effective military alliance the world has ever seen, and it has kept us safe for many decades, and we are fully committed to Nato.
“Secondly, that whatever the pressure on me and others, whatever the noise, I’m going to act in the British national interest in all the decisions that I make.
“And that’s why I’ve been absolutely clear that this is not our war and we’re not going to get dragged into it.
“But I’m equally clear that, when it comes to defence and security and our economic future, we have to have closer ties with Europe. That’s why we had the summit last year.
“This year, as I’ve just announced, there’ll be a further summit. There, we will make good on equipment that we put in place last year, but we will also go further in relation to the alignment.”
Starmer insists he has ‘long-term plan’ over Iran war
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Sir Keir Starmer warned the Iran war will “affect the future of our country” but insisted the UK was “well-placed” to weather the storm as the conflict hits the economy and pushes up fuel and energy costs for consumers.
The Prime Minister sought to reassure Britons that there would be a “long-term plan” in place to emerge a “stronger and more secure nation” amid widespread concerns about the impact of the conflict on the cost of living.
Sir Keir said: “It is now clear that the impact of this war will affect the future of our country.
“So, today, I want to reassure the British people that no matter how fierce this storm, we are well-placed to weather it and that we have a long-term plan to emerge from it a stronger and more secure nation.”
Starmer defends Nato as Trump considers withdrawal
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Sir Keir Starmer defended Nato as “the single most effective military alliance the world has ever seen” after Donald Trump said he was considering pulling the US out of the bloc.
The Prime Minister said he would act in the national interest “whatever the noise” after the US president called the alliance a “paper tiger” in an interview with The Telegraph.
Starmer wants ‘closer economic cooperation’ with EU
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Britain will seek even closer economic and security ties with Europe, Sir Keir Starmer has said, as relations with the US continue to worsen.
The Prime Minister has sought to “reset” relations with the European Union since entering office, but he vowed today to be “more ambitious”.
He told journalists: “The UK will not just ratify existing commitments made at last year’s summit.
“We want to be more ambitious, closer economic closer, security, closer economic cooperation, closer security cooperation, a partnership that recognises our shared values, our shared interest and our shared future, a partnership for the dangerous world that we must navigate together.”
His remarks come after Donald Trump told The Telegraph this morning that he was strongly considering pulling the US out of Nato.
Starmer vows to make UK ‘fairer and more secure’
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Sir Keir Starmer has vowed to make Britain “a fairer and more secure country” following the war in Iran.
In an attempt to seize the political narrative in the middle of a global conflict over which Britain has little control, the Prime Minister said the UK would not return to the “status quo” after the conflict ends.
He said: “I’m not prepared to ask the British people once again, to go through a crisis, and say business as usual, back to the status quo.
“So on our economy, on our energy and on our defence, this time will be different. We will make Britain a fairer and more secure country, because that hope is what is needed as the country comes together, and because how we emerge from this crisis will define us for a generation.”
Iran war shows we need to be closer to EU, says Starmer
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Sir Keir Starmer said the war in Iran showed Britain needed to be closer to the European Union.
He said that the future was “not going to be easy, clearly” as the conflict pushes up costs.
He said: “In the coming weeks... we will continue to assess the economic affects, we will continue to stand up for the British national interest, and we will continue to do what we must to guide our country calmly through this storm.
“However, it is increasingly clear that as the world continues down this volatile path our long term national interest requires closer partnership with our allies in Europe and with the European Union.
“We have made progress on this front, on agriculture, electricity, emissions trading and more, but as the Chancellor has rightly pointed out, Brexit did deep damage to our economy.”
Starmer: Iran war will impact future of UK
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Prime Minister Sir Keir Starmer has warned that the impact of the Iran war will “affect the future of our country” but insisted that “no matter how fierce this storm, we are well-placed to weather it”.
The Prime minister unveiled a five-point plan to address the “immediate crisis” caused by the conflict.
Foreign Secretary to hold talks on reopening Strait of Hormuz
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Yvette Cooper will host a meeting of 35 nations later this week to “assess all viable diplomatic and political” means to reopen the Strait of Hormuz.
Sir Keir Starmer announced that the Foreign Secretary will hold talks between all the countries to find a way to “restore freedom of navigation” in the region.
The Prime Minister said: “The UK has now brought together 35 nations around our statement of intent to push as one for maritime security across the Gulf.
“And today, I can announce that later this week, the Foreign Secretary will host a meeting that brings those nations together for the first time, where we will assess all viable diplomatic and political measures that we can take to restore freedom of navigation, guarantee the safety of trapped ships and seafarers and resume the movement of vital commodities.”
PM: This will not be easy
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Sir Keir Starmer said the country was “working at pace for de-escalation and peace” and insisted Britain would not be “drawn into” the conflict.
However, he warned the public “this will not be easy” at a press conference in Downing Street.
He said the shipping industry was concerned about safe passage through the Strait of Hormuz along the Iranian coast.
Starmer vows to ‘protect the British people at home and abroad’
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Sir Keir Starmer will address the nation on the cost of living crisis in a Downing Street press conference shortly, writes Emily Smith.
He has vowed to “protect the British people at home and abroad” in an “uncertain and volatile world”.
He said: “I know the public are concerned about the conflict in Iran and what it means for them and their families.
“I want to reassure them that they have a Government on their side, working with allies on de-escalation and bearing down on the cost of living.”
However speaking to BBC Breakfast, Rachel Reeves hinted that households will not receive support with energy bills for six months.
The Chancellor confirmed that support will be targeted to the poorest households however it may not come until the autumn.
Ms Reeves also refused to commit to immediate support for drivers, adding that she had to be “careful” with cuts to fuel duty or VAT on petrol because it risked pushing up inflation.
Oil and gas prices have surged since the start of war in Iran due to Tehran’s block of the Strait of Hormuz. The Government has been criticised for being slow to react in response to the crisis.
Trump interview: I am strongly considering pulling out of Nato
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Donald Trump has told The Telegraph he is strongly considering pulling the United States out of Nato after it failed to join his war on Iran.
The US president labelled the alliance a “paper tiger” as he said removing America from the defence treaty was now “beyond reconsideration”.
It is the strongest sign yet that the White House no longer regards Europe as a reliable defence partner following the rejection of Mr Trump’s demand that allies send warships to reopen the Strait of Hormuz.
FTSE 100 leaps after Trump comments
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UK stocks surged as Donald Trump raised the prospect of an impending end to the Iran war.
The FTSE 100 surged by as much as 1.7pc after the US president said he wanted the Middle East conflict to be over in “two to three weeks”.
The mid-cap FTSE 250 was up 2pc over hopes an end to the conflict would deliver a less severe blow to growth.
Michael Brown, an analyst at Pepperstone, said: “A combination of euphoria, exuberance, and relief has driven a considerable rebound in risk appetite over the last day or so, as hopes grow for a swift end to conflict in the Middle East.”
Factory production falls for first time in six months
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Britain’s manufacturers suffered their first drop in production in six months as bosses scaled back output over the war in the Middle East.
The closely watched S&P Global UK Manufacturing PMI, a key indicator of the health of the sector, showed factories scaled back production volumes over the “rising uncertainty” caused by the war.
Delivery times lengthened at the steepest rate since mid-2022, when the world was grappling with the supply shock caused by Russia’s invasion of Ukraine.
Meanwhile, factory inflation jumped at its fastest pace since Black Wednesday, when Britain’s withdrawal from the European Exchange Rate Mechanism triggered a run on the pound in 1992.
Business optimism about factory output dropped to its lowest level September as the closure of the Strait of Hormuz disrupted supply chains and pushed up costs last month.
Rob Dobson, director at S&P Global, said: “UK manufacturing output contracted for the first time in six months in March, as the war in the Middle East and ongoing concerns about domestic economic policy led to a scaling back of production.
“The impact of the war also caused noticeable shifts in the cost and supply chain backdrops. Delivery times lengthened to the greatest extent since mid-2022, while the acceleration in input price inflation was the steepest since the aftermath of the UK’s withdrawal from the ERM in 1992.”
German economy faces weaker growth over Iran war
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Germany’s leading economic institutes have cut their growth forecasts for Europe’s largest economy this year over the Iran war.
Economists said GDP would expand by 0.6pc this year, down from September’s projections of 1.3pc.
They said growth in 2027 would also be lower, down from 1.4pc to 0.9pc as the Middle East conflict pushes up energy costs.
The war has already pushed German inflation up to 2.8pc in March.
Australian PM urges commuters to switch to trains and buses
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The prime minister of Australia urged people to switch from driving cars to commuting via trains or bus where possible as he warned “the months ahead may not be easy”.
Anthony Albanese warned the economic shocks of the war in the Middle East would be felt for months as he delivered a major television address to the nation.
He urged people to enjoy their Easter holidays but only to use the amount of fuel needed for trips, rather than stocking up.
He said: “I understand that right now it’s hard to be positive.
“The war in the Middle East has caused the biggest spike in petrol and diesel prices in history. Australia is not an active participant in this war. But all Australians are paying higher prices because of it.
“The economic shocks caused by this war will be with us for months.”
Trump fuels European stocks rally
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European stock markets leapt as Donald Trump signalled he wanted to end the conflict in the Middle East in the near future.
The Stoxx 600, which includes stocks from across the continent, was up 2.3pc, while Germany’s Dax jumped 2.5pc.
Oil price-sensitive travel stocks jumped 4.2pc, while heavyweight banks climbed 3.9pc.
Mr Trump told reporters at the White House on Tuesday that “we’ll be leaving very soon” when asked about the conflict.
He said the exit could take place “within two weeks, maybe two weeks, maybe three”.
Trump is ‘unconventional president’
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Donald Trump is a “very unconventional president,” the Business Secretary has said, after the president hit out at allies unwilling to support the US war effort.
Speaking on Sky News, Peter Kyle said: “We have a very unconventional president, he uses the bully pulpit on social media very effectively. He dominates a lot of debate. Let’s just see what actually happens.”
He added: “We do hear a lot of rhetoric from the President on social media.
“He uses rhetoric to destabilise; he uses rhetoric in order to keep people on their toes. We are very much in touch with the American administration.”
Asked if it would be embarrassing if Mr Trump insults the Prime Minister in front of the King during a royal visit to the US in April, Mr Kyle said: “I think it is really important that the King, at this is very challenging time when it comes to rhetoric, is there showing that our two peoples have such affection for each other, despite all of the challenges in the relationship.
“It is still a relationship where the deals that we signed have always endured.”
UK borrowing costs plunge as Trump talks of ending war
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The cost of government borrowing fell sharply as Donald Trump suggested the war in Iran would be over in “two to three weeks”.
Bond yields dropped sharply across Europe, lowering the returns that governments must promise to buyers of their debt.
The yield on 10-year gilts, as UK bonds are known, declined by 0.11 percentage points to just under 4.8pc on Wednesday, which was its lowest level in two weeks.
Gas prices drop over hopes for end to war
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The price of wholesale natural gas sank after the US and Iran signalled they are willing to end the war in the Middle East.
Europe’s benchmark gas contract has dropped by 13pc over two days to the lowest level in three weeks after Donald Trump said the war in Iran could be over in “two to three weeks”.
Dutch TTF, as the contract is known, was last down 5.5pc on Wednesday to less than €48 per megawatt hour.
FTSE 100 surges at the open
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The UK’s stock markets leapt at the open after Donald Trump talked of ending the war in Iran.
The FTSE 100 climbed 1.1pc to 10,284.87 as Iranian President Pezeshkian also said the country was willing to end the war, so long as there are guarantees “to prevent the recurrence of aggression”.
The mid-cap FTSE 250 rocketed by 2pc to 21,625.24.
Oil drops below $100 after Trump talks of ending war
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The price of oil dropped below $100 a barrel for the first time in a week after Donald Trump suggested the war could be over in “two to three week”.
Brent crude was last down 3.9pc on the day to $99.94, having climbed as high as $119.24 on Tuesday.
PM to hold press conference on Iran war blow to bills
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The Prime Minister is due to speak at a press conference about the cost of living this morning.
Sir Keir Starmer is expected to provide an update amid concerns over the amount energy bills could rise as a result of the Middle East conflict.
It is thought the Downing Street press conference will cover both the conflict and Government support for households as rising prices bite, after the Prime Minister vowed to “protect the British people at home and abroad”.
Jet fuel has no supply chain issues, insists Business Secretary
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There are no supply chain issues for jet fuel “at this moment”, the Business Secretary said.
“We have no (fuel) supply chain issues at this moment at all,” Peter Kyle told Times Radio.
“So people need to just realise that our country is well supplied when it comes to critical infrastructure and fuel.”
Mr Kyle was asked about the supply of medicines following NHS England chief executive Sir Jim Mackey saying he was “really worried” about the issue on Tuesday.
He added: “What the NHS boss said this week was that he was worried about live medicines, one very specific medicine type in the NHS.
“He has raised that concern, and we will look at that concern. But he is not talking about all medicine and all parts of the NHS.”
UK and European stocks poised to surge
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European stocks are expected to surge after comments from Donald Trump and Iran on ending the Middle East war.
The FTSE 100 was up 2.3pc in premarket trading, while the Cac 40 in France was up 2.1pc and the Dax was on track to jump 2.5pc.
It comes after the S&P 500 on Wall Street enjoyed its strongest day since May on Tuesday over renewed hopes for an end to the war.
Peter Sidorov, an analyst at Deutsche Bank, said: “The biggest trigger for yesterday’s rally came shortly after the European close as Iran’s state news agency reported Iranian President Pezeshkian saying that Iran is willing to end the war but only if there are guarantees ‘to prevent the recurrence of aggression’.
“While it wasn’t clear if these comments represented a material change in Iran’s position – indeed, in large part they reiterated demands floated by Tehran last week – they helped drive an extension of the rally that emerged amid signals that the US may be looking for off-ramps out of the war.”
Reeves says help with bills to be ‘based on household income’
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Rachel Reeves has said any government support for those struggling with higher energy bills would be based on household income.
The Chancellor suggested it was still “too early” to outline what help would be offered from July, when the price cap on bills is expected to jump sharply.
“We’re looking at ways in which we can support people based on their household income,” Ms Reeves told the BBC.
“I want to learn the lessons of the past because when Russia invaded Ukraine, the richest, the best-off third of households got more than a third of the support. That makes no sense at all.”
Average annual household energy bills have dropped to £1,641 from today under the Ofgem price cap, which covers April to June.
Mr Reeves added: “From July to September, gas usage, especially by families and pensioners, is the lowest of any months of the year because it is the summer months.”
When asked if support could go beyond people who receive benefits, Reeves said: “We’re looking at ways in which we can support people based on their household income.”
Good morning
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Thanks for joining me. Stock markets rallied after Donald Trump said the war in Iran would be over in two to three weeks.
Asian shares surged overnight after the US president’s comments helped power Wall Street to its best day in nearly a year.
Stock markets in the UK and Europe were also expected to rise sharply at the start of trading after the US president said his war in Iran would end in “two to three weeks”.
Oil prices fell sharply from as high as $119 on Tuesday to $103 a barrel after Mr Trump said “Iran doesn’t have to make a deal” to end the conflict, adding that “we’ll be leaving very soon”.
He added that the US “will not have anything to do with” what happens next in the Strait of Hormuz.
Stocks rocketed overnight in Asia, which is heavily reliant on the Middle East for imports of oil.
South Korea’s benchmark index surged by 8.8pc and Japan leapt 5pc.
The White House said Mr Trump will deliver a public address Wednesday evening on the Iran war. Here is what you need to know.
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What happened overnight
Asian shares rose sharply after US stocks had their best day in almost a year on renewed hopes that the Iran war could soon end.
South Korea’s Kospi recovered its losses from earlier this week, surging 8.1pc to 5,461.51, while Tokyo’s Nikkei 225 rose 4.5pc to 53,352.96.
A survey by Japan’s central bank released Wednesday showed business sentiment for major Japanese manufacturers improved despite Iran war worries.
Hong Kong’s Hang Seng was up 2pc to 25,283.12, while the Shanghai Composite index was trading 1.4pc higher at 3,946.67.
Australia’s S&P/ASX 200 was up 2pc to 9,650.90. Taiwan’s Taiex climbed 4.4pc, and India’s Sensex rose 2.2pc.
The renewed optimism over a possible de-escalation of the Iran war, which is in its fifth week, came after Donald Trump said on Tuesday the United States will be done attacking Iran probably in two to three weeks.
He added that the US “will not have anything to do with” what happens next in the Strait of Hormuz.
The White House said Mr Trump will deliver a public address Wednesday evening on the Iran war.
Oil prices have fallen back following the comments. Brent crude, the international standard, was up 0.7pc at $104.66 in early trading, having risen as high as $119 on Tuesday. Benchmark U.S. crude rose 1.2pc to $102.57.
Wall Street advanced on Tuesday. The S&P 500 jumped 2.9% for its largest gain since May to 6,528.52. The Dow Jones Industrial Average surged 2.5% to 46,341.51, and the Nasdaq composite leaped 3.8% to 21,590.63.
The S&P 500 increased 2.9pc for its largest gain since May to 6,528.52.The Dow Jones Industrial Average surged 2.5pc to 46,341.51, and the Nasdaq Composite leaped 3.8pc to 21,590.63 after Iran’s president Masoud Pezeshkian signalled the country would be open to striking a ceasefire deal with America.