silverguide.site –
An uneasy, incomplete peace has broken out across most of the Middle East. For now, the hostilities between Iran, Israel and the US are on pause as both sides try to negotiate a permanent end to the fighting.
The human cost has been enormous: thousands are dead and millions have lived under the terror of constant bombardment for the last six weeks. In Lebanon, Israeli attacks continue. The economic consequences of the fighting have brought misery, too. In the UK, the spectre of inflation has returned, driven by a global surge in energy prices since the start of the conflict.
Today for First Edition, I spoke to Richard Partington, the Guardian’s senior economics correspondent, about the economic fallout of the war and how it affects people’s finances in the UK. But first, the headlines.
Five big stories
Iran war | Benjamin Netanyahu said there was “no ceasefire in Lebanon” and Israel would continue “to strike Hezbollah with full force” as the Israeli military launched fresh strikes. In the US Congress, Republicans blocked an attempt by Democrats to pass a resolution curtailing Donald Trump’s power to wage the Iran war.
US | For reasons not immediately clear, Melania Trump, the US first lady, stood at a podium on Thursday to tell reporters that she “never had a relationship” with the late sex offender Jeffrey Epstein and his accomplice Ghislaine Maxwell. There was confusion about why she issued the unsolicited statement.
UK news | A British warship and aircraft tracked and monitored Russian submarines trying to survey vital undersea infrastructure in the North Atlantic, ensuring they fled the area.
Politics | Zack Polanski has called on the government to tear up the UK-Israel trade agreement after Israeli strikes on Lebanon.
Technology | OpenAI has put on hold plans for a landmark project to strengthen the UK’s AI capabilities, citing high energy costs and regulation.
In depth: A drastic change in just six weeks
Just six weeks ago, there was an air of cautious optimism about the UK economy after years of disappointment. Markets expected the Bank of England to cut interest rates, making mortgages cheaper and encouraging businesses to invest. Energy prices were lower, having come down from a huge spike after Russia’s invasion of Ukraine. Growth was modest, but leading economists wondered if it might finally exceed expectations.
Then, the US and Israel attacked Iran – and the picture rapidly changed. Oil prices surged after the strait of Hormuz was closed by Tehran, cutting off 20% of the world’s oil supply. Prices at the pump jumped almost instantly – and the knock-on costs are filtering through to UK consumers. The country’s growth prospects have been downgraded, and markets expect interest rates to rise slightly instead of falling, as a result of “Trumpflation”.
***
An increasingly bleak economic forecast
As you might imagine, none of this is good news for the UK’s economic outlook. And the decisions made over the coming days and weeks in the Middle East will continue to have ripple effects.
“Any signs of de-escalation are obviously positive,” says Richard – emphasising first and foremost the relief people in the Middle East must feel, at least for the meantime.
The economic fallout in the UK could spell financial hardship for some people. “The price of petrol has rocketed. Mortgage costs have risen pretty dramatically. Some people’s house purchases have fallen through because some banks have pulled deals,” he says, warning that there is likely more bad news to come.
“If a supermarket is distributing food around the country, it has a fleet of lorries that it needs to fill up with diesel. It needs to recover the cost. So what does it do? It puts up prices,” he says.
All of this will affect the poorest worst. The cost of living crisis has only deepened since it began in 2022, with four in 10 adults struggling to pay their energy bills, according to official data. Things could get even harder still for the 3.8 million people in the UK experiencing destitution, meaning that households cannot afford to stay warm, dry, clean, clothed and fed, according to the Joseph Rowntree Foundation.
***
A nation fuelled by debt
The economic consequences of the US and Israel’s attack on Iran have heaped further pressure on the government’s finances. Debt is nearly 100% of GDP after ratcheting up in response to successive economic shocks like the pandemic – and all of that debt costs more in the immediate term, explains Richard.
“About one in every £100 the government spends is on debt interest, which is much higher than it has been. We are spending about £100bn a year just on interest,” says Richard. For context, that’s almost 90% of the Department for Education’s entire budget – just spent on interest.
The government is also spending more than it takes in through taxes, meaning it must borrow the rest on financial markets. That type of borrowing can also get very expensive – and has become more expensive since the war began.
***
Will the UK government provide any support with rising bills?
Rachel Reeves has hinted at providing limited support to targeted groups in the autumn when cold temperatures return. But she has ruled out an enormous universal programme like the one offered by Liz Truss’s government, which many economists blame for the ensuing inflation spike.
“Where you draw the cutoff line is difficult, but in 2022, you had households on the poverty line getting the same amount of money as a billionaire with a Mayfair penthouse. That doesn’t feel fair, that’s why they want targeted support,” says Richard.
Still, questions around whether this is enough will continue to bite at the hugely unpopular Labour government – which, when re-elected for the first time in 14 years nearly two years ago, promised a country that works for working people.
***
Reasons for optimism
Despite the ceasefire in the Middle East, economic optimism is hard to come by. On Thursday, the oil price climbed and markets wavered as questions grew about the durability of the peace deal. Oil tankers are passing through the strait of Hormuz at an even slower rate than during the fighting, amid questions about a new tax that needs to be paid to Iran for safe passage.
Richard cautions that a breakdown in the peace agreement would bring even more bad news for the UK. But it also brings a moment of opportunity.
“A reignition of this war could have consequences similar to the Covid-19 pandemic. We are hugely reliant on fossil fuels, particularly from the Middle East. It highlights the fragility and we need to try to reduce that dependence on fossil fuels in order to bring back that degree of stability. It’s going to be costly and it will take time, but it is now seen as increasingly necessary,” he says.
What else we’ve been reading
Damian Carrington on the worrying development that record-low levels of Antarctic sea ice are having grim consequences for emperor penguin chicks that have yet to grow waterproof feathers. Martin
Grab a cup of tea and work your way through the World Press Photo 2026 winners. I was really moved by the Emma the Social Robot photo. There’s also a spectacular shot of a polar bear feasting on a sperm whale carcass. Patrick
I know what my answer would be, but Sophie Wilson looks at a rising trend and asks – would you let AI help you choose your next tattoo? Martin
Amy Raphael has a great interview with American film-maker Jim Jarmusch, who speaks about the UK release of his film Father Mother Sister Brother – and his antics with Steve Coogan. Patrick
I am sometimes among the Leyton Orient travelling faithful, but not close to “doing the 92”. David Marples, over 43 years, has been to every league ground, and reflects on how football has changed during that time. Martin
Sport
Football | Jean-Philippe Mateta revelled in the restored backing of fans as he scored a penalty that set Crystal Palace on the way to a 3-0 first-leg win over Fiorentina in the Uefa Conference League. A bizarre own goal from Martim Fernandes earned Nottingham Forest a 1-1 draw at Porto after a William Gomes opener in the Europa League quarter-final first leg.
Golf | The defending US Masters champion Rory McIlroy shared the lead with Sam Burns after an opening 67 at Augusta, while Jon Rahm and Bryson DeChambeau both struggled.
Rugby union | Women’s Six Nations 2026: team-by-team guide to the tournament.
Something for the weekend
Our critics’ roundup of the best things to watch, read, play and listen to right now
TV
The Assembly | ★★★★★
The Assembly is not a standard chatshow. This is the one where a famous person – in this case Stephen Fry – is interrogated by a group of young adults who are neurodivergent or have learning disabilities and are less inhibited by the ordinary protocols of TV interviews. Every question is simultaneously something no conventional interviewer would ever contemplate saying, and something we are immediately interested in seeing the guest react to. Celebs enter that bright, high-windowed room overlooking the Thames with a mix of joy and trepidation, knowing that the artifices and pretensions that usually protect them don’t apply here. Jack Seale
Music
My New Band Believe: My New Band Believe | ★★★★☆
Cameron Picton’s first post-Black Midi album as My New Band Believe was recorded with a host of left-field and improv-friendly musicians, among them veteran drummer Steve Noble, once of skronky 80s post-punk hellraisers Rip Rig + Panic. Its sound is entirely acoustic, the live-sounding recordings of fingerpicked guitar, double bass, piano and percussion augmented by string arrangements. Its lyrics largely abandon the flights of fancy that characterised his old band’s oeuvre in favour of a more direct approach. There’s definitely a hint of Black Midi’s penchant for the grotesque in the revenge fantasy of opener Target Practice, but more often they alight on more prosaic topics. Alexis Petridis
Art
Wilhelm Sasnal | ★★★☆☆
Wilhelm Sasnal has transformed the ground floor of Sadie Coles’ elegant gallery into a parade of broken images: the Oval Office, a ghastly forest, a blasted tree trunk, the artist’s wife and daughter, a British post-punk band, and the sitting US president surrounded by cronies, his face resembling the burn produced by screwing a lit cigarette into a photograph. These paintings, most of which are untitled, are broken in the sense that an online link can be broken: it is difficult to connect them to their source. They are also broken in that they do not fit together as a whole. What connects that revolting White House interior, with its acid greens and faecal browns, with a spooky forest? What links President Trump to the founders of industrial music? Ben Eastham
Film
Stand By Me | ★★★★★
One hot summer day in the late 50s, remembered in flashback with narrative voiceover, four boys go on what amounts to a secret, secular pilgrimage in search of the corpse of a missing kid their own age, rumoured to lie next to some distant railway tracks, having been hit by a train. The resulting adventure – bizarre, mysterious and moving – is about lost youth and the recovery of innocence through writing and memory. Rob Reiner’s film was released in 1986; since 1993 its added poignancy had resided in the fact that one of its actors, River Phoenix, died of a drug overdose. But now there is a terrible new layer of sadness superimposed on the film’s themes of innocence and death: the murder in 2025 of Reiner and his wife, Michele Singer Reiner. Peter Bradshaw
The front pages
“Netanyahu calls for Lebanon talks after Israeli airstrikes condemned” says the Guardian. The Times has “US prepares to punish Nato states for Iran rift” while the Telegraph runs with Melania Trump breaking the news about herself: “I had no relationship with Epstein”. The Mail’s splash is “Now Red Ed’s green idiocy halts AI deal worth billions” while the i paper reports “Russia used the Channel to move ‘war supplies’ – as threat to UK from Putin escalates”.
On that, the Mirror has “We see you, Vlad”. British tourists are “Blockaded by French fuel protest” in Corsica, says the Express. The Financial Times runs with “Oil prices spike above $100 a barrel as shut strait strains fragile ceasefire”. Top story in the Metro is “Bag swiper sparks £2m egg hunt”.
Today in Focus
Why the UK banned Kanye West
Lanre Bakare on the UK government’s decision to revoke Kanye West’s visa after Wireless festival booked him as a headliner
Cartoon of the day | Stephen Lillie
The Upside
A bit of good news to remind you that the world’s not all bad
A US man who deliberately allowed himself to be bitten by snakes more than 200 times may have helped unlock a new kind of antivenom. “People said I was crazy,” said Tim Friede – but he was driven by the fact that “people are dying from snakebites”. His self-built immunity is now being used to develop a treatment that could work against multiple species. With snakebites killing up to 138,000 people a year, he said: “I knew I was immune and that I could help people bridge that gap … I wanted to do it for humanity, for people who are the brokest people on the planet.”
Sign up here for a weekly roundup of The Upside, sent to you every Sunday
Bored at work?
And finally, the Guardian’s puzzles are here to keep you entertained throughout the day. Until tomorrow.
Comment