And finally… a roller-coaster day for markets has ended with London’s stock market at a one-month high!

The FTSE 100 share index has closed for the night up 71.5 points, or +0.7%, at 10,436 points, its highest closing point since the first week of March.

Stocks had fallen this morning, after hopes that Donald Trump would outline an end to the Iran war overnight were dashed, with Trump threatening to take Iran back to the ‘stone ages’.

But there’s been a recovery this afternoon, following reports that Iran is drafting a protocol with Oman to oversee traffic in the strait of Hormuz (see here for details).

Oil companies, and ‘defensive stocks’ such as utilities led the risers, as investors looked for safer places for their money.

AJ Bell head of financial analysis Danni Hewson says:

“The prospect of further escalation over the weekend has seen many investors rush to take defensive positions.

“In London, the focus has been on stuff people can’t do without even when their cost of living is under pressure.

European markets closed in the red – Germany’s DAX fell 0.8%, and France’s CAC lost 0.4%.

Stocks are still lower on Wall Street, where the Dow Jones industrial average is currently down 104 points, or 0.23%, at 46,460 points, recovering some of its earlier losses.

Anxiety over the Middle East crisis drove oil up today, with US crude oil surging over $110 a barrel.

Brent crude has dipped back from its highs, but is still up 6% tonight at $107.17 a barrel.

Our Middle East liveblog has all the latest developments:

Iranian Deputy Foreign Minister Kazem Gharibabadi has apparently told Sputnik, the Russian government-owned news agency, that Iran has nearly completed its draft protocol, which would establish a new navigation regime in the strait of Hormuz.

Gharibabadi told Sputnik:

“The draft of this protocol is currently in the final stages of preparation. Once we have it ready, we will begin negotiations with Oman so that we can draft a joint protocol.”

Gharibabadi then explained that the protocol would mean that, in peacetime, all vessels that pass through the strait must have all the necessary agreements with the coastal states - Iran and Oman, and obtain the necessary permits and licenses in advance.

Oil is dipping from its earlier highs, and stock markets are recovering losses, following a report that Iran and Oman are working on a ‘protocol’ to cover marine traffic in the strait of Hormuz.

Here’s Reuters’s newsflash:

• IRANIAN FOREIGN MINISTRY OFFICIAL SAYS IRAN DRAFTING PROTOCOL WITH OMAN TO MONITOR TRAFFIC IN HORMUZ STRAIT - IRAN’S IRNA

Wall Street has opened with a bump, as traders react to Donald Trump’s address to the nation on the Iran crisis last night.

The Dow Jones industrial average has dropped by 624 points, or 1.3%, at the start of trading as it falls to 45,941 points (further from the 50,000 point mark hit in February)

The broader S&P 500 index has dropped by 1.25% at the start of trading.

The sell-off highlights that investors’ hopes of de-escalation, which build up earlier this week, are wilting.

David Morrison, senior market analyst at financial services provider Trade Nation, says Trump signalled an escalation, not a wind-down, last night:

Hopes had been raised that Mr Trump would announce an end to hostilities, and this had contributed to gains across risk assets earlier in the day, building on those made on Tuesday. But the President confirmed earlier statements made by him and members of his administration, that military operations would likely continue for another two or three weeks.

He reiterated that US objectives in Iran were almost met but warned that the US would hit Iran “very hard” and would only agree to a ceasefire once the Strait of Hormuz was ‘open, free and clear’.

The International Monetary Fund is warning the White House that Donald Trump’s trade war will slow the US economy.

In its latest assessment of the US, the Fund says:

Directors expressed concern about the shift in U.S. trade policy, noting that the increase in tariffs and in trade policy uncertainty are expected to reduce U.S. activity and create sizeable negative spillovers on its trading partners.

The Article IV Consultation also points out that “tariffs boosted goods prices”, which wiped out the benefits from falling services inflation.

The IMF also voiced concern about the Iran war, saying:

Directors expressed concerns about the heightened domestic and global uncertainties posed by the significant ongoing policy shifts and the war in the Middle East.

More happily for the White House, the IMF also predicts growth will rise to 2.4% in 2026, up from 2% in 2025.

But…, they are also calling for “determined actions” to address fiscal imbalances.

Back in the UK, drivers will feel the impact of Donald Trump’s attack on Iran when driving during the Easter break.

Motor fuel prices have risen again today, meaning that diesel prices are up 30% since the conflict began.

RAC head of policy Simon Williams has the detais:

“Petrol has now gone up nearly 22p a litre - or 16% - to an average of 154.45p since the start of the conflict in Iran on 28 February. It was last this high at the end of October 2023.

“The diesel story is even more dramatic, having shot up by almost 9p in the last week alone. It’s now risen by 30% since the end of February, with 43p a litre being added, taking it to an average 185.23p - a price last recorded at the end of November 2022.

“Finding the cheapest forecourts by using the fuel finder in the myRAC app has become vital as it can save several pounds at each fill-up. Driving fuel efficiently by keeping steadily within the speed limit in the highest gear possible and avoiding harsh use of the accelerator can also make fuel go further.”

US crude has surged over $110 a barrel today, for the first time in over three weeks.

The price of a barrel of West Texas Intermediate has jumped by 10% today, after US President Donald Trump vowed to hit Iran “extremely hard” for the next few weeks, dashing hopes of de-escalation and an early end to the conflict.

US crude is trading at $111 a barrel, the highest level since 9 March.

This puts a barrel of WTI above the international benchmark, Brent crude, which has jumped more than 8% to $109.32 a barrel.

Although Trump pledged last night to finish the operation in Iran “very fast”, traders seem disappointed by the lack of detail about how the conflict may end.

Daniela Hathorn, senior market analyst at capital.com, says:

Markets are increasingly pushing back against the idea that Trump’s latest address signals de-escalation. In fact, price action suggests the opposite.

Despite attempts to frame the situation as manageable and short-lived, the tone of the speech was more consistent with a war rally, reinforcing the likelihood of further escalation rather than resolution. The renewed threats to strike Iranian energy infrastructure if negotiations fail have shifted the narrative back toward rising geopolitical risk, which is now clearly being reflected in markets.

That helps explain the current configuration: oil higher, equities lower and the dollar stronger.

The eurozone could be pushed into recession if the strait of Hormuz remains effectively closed for months, Morgan Stanley economists have warned.

Morgan Stanley have cut their growth forecasts for the euro area today. They now expect GDP in the zone to rise by just 0.6% this year, down from 1% forecast before the invasion. Growth is then expected to pick up to 0.9% in 2027, down from 1.2% in their “pre-March view”.

This ‘baseline scenario’ is based on the assumption that 80% of tanker passage through the strait resumes within a month, with Iran retaining influence in the crucial waterway (through which a fifth of global oil and gas used to flow.)

Under this baseline, Brent crude would peak at $110 a barrel in the April-June quarter. The scenario does not entail a global recession, but predicts that demand will be lower everywhere.

But, Morgan Stanley add, the situation could be resolved faster, or slower…

A rapid “de-escalation” would likely come with a short-lived slow down and growth back to 1.2%Y in 2027. Conversely, an “effective closure” of the Strait, would likely push the euro area into recession for the remainder of 2026.

Something for leaders to ponder as the UK convenes 35 countries today to explore ways to reopen the strait of Hormuz:

The UK economy was already in poor shape when the war started just over a month ago, my colleague Larry Elliott writes, in his latest column.

Unemployment had been steadily rising during 2025 and growth came to a virtual standstill in the final quarter of the year. Now it is being hit by a colossal supply shock as exports of oil, gas and fertiliser from the Middle East have dried up.

This time last year there were fears of global recession after Trump announced “liberation day” tariff increases on goods imported into the United States. In the end, the global trade war was merely a dry run for the real thing – a proper war in a part of the world that happens to be not only volatile, but crucial for the global economy to boot.

The Iran conflict is pushing the US economy into a ‘warflation’ dynamic, according to Evelyn Partners’ chief investment strategist Daniel Casali.

Casalia argues that the risk of 1970s-style US stagflation – rising unemployment and weak growth - is low.

He explains:

The US economy today is probably less vulnerable to stagflation. It is far less energy‑intensive, having shifted from heavy industry like steel, toward lighter manufacturing. The country’s status as a net energy exporter allows supplies to be redirected domestically.

Instead, we’re more likely to see ‘warflation’, where inflation rises due to supply shocks while employment stays firm.

Casalia writes:

The Middle East conflict has driven oil prices higher, causing market volatility and triggering ‘warflation’, where inflation rises due to supply shocks while employment stays firm. Equity markets remain resilient, but risks include rising recession odds, tighter financial conditions and higher rates. Energy stocks, US dollar exposure in portfolios, inflation‑linked bonds and short-duration sovereigns potentially offer some protection, while gold’s sell‑off may be temporary.

UK companies are planning to raise their prices at a faster rate as the Iran was drives up their costs, new data from the Bank of England shows.

The BoE’s latest poll of chief financial officers at small, medium and large UK businesses has found that expectations of “own-price inflation” over the next 12 months have risen to 3.7% in March, up from 3.4% in February.

This shows firms are “adjusting their expectations as a result of the recent increases in energy prices”, the Bank says.

We saw evidence of this earlier this morning, when cleaning company McBride announced it is raising its prices (see earlier post).

The BoE’s Decision Makers Panel – which polls firms across the whole economy – also found a rise in business uncertainty.

It says:

In March 2026, overall uncertainty rose, with 57% of firms reporting that the overall level of uncertainty facing their business was high or very high, up by 10 percentage points from February. Uncertainty around year-ahead prices also increased in the March 2026 single month data.

UK gas prices have risen this morning, as traders anticipate further disruption to supplies from the Middle East.

The month-ahead UK wholesale gas contract is up 3.5% at 124.6p a therm.

Before the Iran war began, this contract was trading around 77p a therm. However, it’s still below its recent peak of above 150p set last month.

Susannah Streeter, chief investment strategist at Wealth Club, says:

“High hopes have been replaced by fresh frissons of fear about the duration of the war with Iran after President Trump’s bellicose speech, which gave no indication the conflict was very close to ending. Instead, the military looks set to intensify attacks, which is likely to provoke retaliatory strikes by Iran and risks destabilising the region further.

The big concern will be about further damage to energy facilities across the Gulf. The repair work is already likely to take years, and further destruction is likely to keep oil and gas prices elevated for even longer. A barrel of Brent crude has jumped sharply, reflecting these worries, and is trading back up at $107 a barrel. European and UK gas futures have also jumped by more than 5% and are set to stay highly volatile. Around a fifth of global LNG supplies are usually transported through the Strait of Hormuz, but it remains largely impassable, and it’s becoming clear that there is going to be no easy exit from this war, with a lack of planning increasingly evident.

Overnight, three major institutions have warned that the Middle East crisis is hitting global supply chains, causing market volatility and threatening growth.

In a joint statement, the heads of the International Energy Agency, the International Monetary Fund, and World Bank Group said the impact of the war would be ‘substantial, global and highly asymmetric, disproportionately affecting energy importers’.

The IEA, IMF and World Bank are now going to create a coordination group to “navigate this crisis”.

This group will assess the severity of impacts across countries and regions, coordinate a response mechanism, and mobilize relevant stakeholders.

They warn:

The Middle East war has caused major disruptions to lives and livelihoods in the region and triggered one of the largest supply shortages in global energy market history.

The impact is substantial, global, and highly asymmetric, disproportionately affecting energy importers, in particular low-income countries. It is already transmitted through higher oil, gas and fertilizers prices, and is triggering concerns about food prices as well. Global supply chains—including of helium, phosphate, aluminum, and other commodities—are affected, as is tourism due to flight disruptions at key Gulf hubs.

The resulting market volatility, weakening of currencies in emerging economies, and concerns about inflation expectations raise the prospect of tighter monetary stances and weaker growth.

UK government borrowing costs are on the rise again, amid the disappointment over Trump’s speech last night.

With bond prices falling, the yield (or interest rate) on UK gilts is going up again.

Ten-year gilt yields are up 4 basis points (0.04 percentage points) back to 4.886%.

Thirty-year gilt yields are up 3bps.

And two-year bond yields have risen by more – gaining 6bps to 4.36%, reflecting increased fears of an inflation spike from higher energy costs.

Global markets have taken a step backwards overnight after Donald Trump’s live address, with the mood shifting sharply from the cautious optimism that had been building in recent days.

So explains Matt Britzman, senior equity analyst at Hargreaves Lansdown, who adds:

From a market perspective at least, the speech appeared to have the opposite effect investors were hoping for, with oil pushing higher, bond yields climbing, and equity markets falling back. Rather than offering any fresh clues on a path toward de-escalation, Trump largely repeated a familiar set of talking points that traders have already digested across social media in recent weeks.

The result is a classic risk-off move across asset classes as hopes for further progress toward de-escalation gave way to renewed uncertainty. The FTSE 100 has opened lower, US futures suggest an unwind of yesterday’s optimism, and rate hike expectations are back on the rise. For investors, this is another reminder of how sentiment can shift quickly, and of how hard it is to time entry and exit points. Being diversified and sticking to a longer-term plan is a much more sensible strategy.

Oil markets are higher once more, with Brent and [US] crude now back above $100, as traders began pricing in the growing risk of disruption to energy infrastructure across the Gulf, amid lingering uncertainty around key shipping routes like the Strait of Hormuz. Comments suggesting military operations in the region could extend for several more weeks have dampened hopes of a near-term resolution, adding a fresh geopolitical risk premium to oil prices. That’s come despite a sizeable 5.5 million barrel build in US crude inventories last week, which would typically have weighed on prices but has instead been brushed aside in the current environment.

Stock markets are falling across Europe, as investors react to Donald Trump’s special address last night, in which he vowed to send Iran “back to the stone ages”.

Frankfurt’s stock market has started the day with a bump; Germany’s DAX share index is down 1.5%.

France’s CAC 40 has dropped by 1.35%, and Italy’s FTSE Mib is down 1.2%.

London’s FTSE 100 index is showing a smaller fall – now down 0.6%, as oil company shares rally.

Chris Beauchamp, chief analyst at IG, says markets are now anticipating longer delays to oil supplies from the Gulf, as Trump didn’t provide guidance for how the conflict may end.

“In what might be the most dramatic April Fools’ of recent years, Donald Trump did nothing of what was expected in his speech. Instead of ‘no more war’, we got ‘no, more war!’, with heavier strikes expected and a fresh warning of attacks on power plants.

This leaves markets back where they were last week, and now we have to price in hundreds of millions of barrels of oil that aren’t coming out any time soon. The gloomy predictions of last week would have been perhaps misplaced if Trump had signalled a quick end, but now markets are back to pricing in economic catastrophe.”

The UK stock market is being propped up by oil producers.

BP (+2.9%) and Shell (+2%) are leading the risers on the FTSE 100 share index, following the 6% jump in Brent crude prices this morning.

The London stock market has joined the global sell-off, as hopes of a quick end to the Middle East conflict fade.

The FTSE 100 index of blue-chip shares has dropped by 0.68%, or 70 points, at the open to trade around 10,297 points.

Yesterday, the ‘Footsie’ had jumped by 188 points, its best day in almost a year, but the optimism that pushed stocks higher has retreated after Donald Trump vowed to hit Iran ‘extremely hard’.

Precious metal miners Fresnillo (-5.7%) and Endeavour (-5.3%) are the top fallers on the FTSE 100, as traders react to a 3% drop in the gold price today.

They’re followed by housebuilder Barratt Redrow (-3.8%) and copper producer Antofagasta (-3.6%), who would both suffer weaker demand if the Iran conflict keeps interest rates high, hurting borrowers and global economic growth.

Jim Reid, market strategist at Deutsche Bank, says Trump’s primetime address has dented market optimism:

After rallying sharply over the previous two sessions, market sentiment has deteriorated overnight after Trump’s much anticipated address last night delivered little to nothing new on potential timelines or conditions for ending hostilities against Iran. The US President claimed that the operation against Iran was “very close” to completion but also said the US “will hit Iran extremely hard over the next 2-3 weeks”. Trump again raised the threat to hit Iran’s power plants if there is no negotiated deal and reiterated the view that shipping via the Strait of Hormuz was other countries’ problem. So while Trump sounded flexible on remaining war aims, for instance claiming that Iran is “no longer a threat”, there was no signal of the US seeking an imminent offramp out of the war.

In response, markets have reversed the continued positive momentum they’d seen yesterday amid rising hopes that an end to the conflict might be coming into view.

UK cleaning products maker McBride is putting up its prices, to pass on increased costs from the Iran war.

McBride, which makes the Oven Pride, Clean n Fresh and Actiff cleaning ranges, told the City this morning it is implementing “temporary” price hikes to cover increased costs from the conflict.

McBride explained that its chemical and packaging suppliers have begin raising their prices to recover the cost of more expensive raw materials, and higher energy costs.

The first signs of possible shortages in supply chains around the world are beginning to emerge, it warns, adding:

As a result, the Group will see elevated input costs in April and expects further increases in the near future. Consequently, the Group has already informed all customers about temporary price adjustments, or surcharges to current pricing, to recover these higher, beyond our control, cost impacts from the Middle East conflict.

With mortgage rates and fuel costs climbing, Britons don’t also need to be wasting cash on unwanted subscriptions.

And new government plans, which aim to better protect consumers from “subscription traps”, could help.

The rules, which could come into force early next year, will ensure consumers receive reminders before their free or discounted trials end, or when contracts of 12 months or more automatically renew.

The changes will also make it easier to cancel subscriptions, and create a a new 14-day cooling-off period for when a free or discounted trial concludes, or when a contract renews for a year or longer.

Business minister Kate Dearden has said that the Government’s new rules for subscriptions will give consumers “more control of their hard-earned cash”.

Speaking to Times Radio, she said:

“I’ve heard from so many people the impacts that unwanted subscriptions or subscriptions that you weren’t aware of, the impact that can have on their finances.

“So we’re making sure that people have more control of their hard-earned cash, that you are more aware of the subscriptions that you signed up to.

“These new rules that we’re announcing today make sure that businesses have to inform you about when a free trial might come to an end.

“That’s right at any point, but especially during a cost of living crisis, when people might want to re-look at their subscriptions.”

Oil is pushing higher too.

Brent crude, the international benchmark, has leapt by over 6% this morning to $107.63 a barrel – yesterday, hopes of de-escalation in the Middle East had pushed it below the $100/barrel mark.

Our Middle East crisis blog is covering all the key events that may move the oil price further today:

Asia-Pacific stock markets are a sea of red after Donald Trump dented hopes of an early end to the Iran war.

All the major stock markets in the region have fallen, after the US president used his primetime address overnight to vow to hit Iran “extremely hard” over the coming weeks.

Hopes of an imminent end to the conflict are fading today, as Trump declared:

“We’re going to hit them extremely hard over the next two to three weeks. We’re going to bring them back to the Stone Ages where they belong.”

Japan’s Nikkei index has fallen by 2.4%, while China’s CSI 300 index is 1.36% lower. South Korea’s KOSPI (which has been particularly sensitive to the crisis) has tumbled by 4.8%.

After a couple of days where markets have struck a decidedly more positive tone, a degree of caution has once again crept into proceedings overnight, says Michael Brown, senior research strategist at brokerage Pepperstone, adding:

President Trump’s ‘address to the nation’ hasn’t helped on this front, with market participants having wanted to hear a bit more than the President provided.

While Trump did note that the US is ‘nearing completion’ of its strategic objectives, and reiterated that those countries reliant on crude flows through Hormuz should be the ones to re-open it, Trump failed to give a definitive timeframe for ending the conflict, while also nothing that Iran will be hit ‘very hard’ over the next couple of weeks.

It’s not just mortgages that are going up, either.

UK petrol and diesel prices jumped by a record amount in March, as the oil supply shock caused by the Iran war quickly rippled to forecourts.

New data from the RAC shows that the average price of a litre of unleaded petrol rose by 20p from 132.83p on 1 March to 152.83p by the end of the month. That surpasses the previous all-time biggest monthly jump of 16.6p recorded in June 2022, following Russia’s invasion of Ukraine.

Diesel prices have risen even more sharply – up 40p in March to an average of 182.77p from 142.38p. That’s almost twice as large as the previous record rise of 22p recorded in March 2022.

RAC head of policy Simon Williams says March’s price rises were ‘unprecedented’, adding:

“The increases drivers have had to endure in March 2026 far exceed those seen in the early days of the war in Ukraine.

“While the monthly rise in a litre of petrol is bad enough, the jump in the cost of diesel is even harder to swallow at 40p a litre.

“With long-term RAC research showing eight-in-10 people are dependent on their vehicles, these costs must really be taking their toll on households as well as businesses.”

However, these record increases are in nominal terms; in real terms, prices rose by more during the oil shock of 1973, the RAC point out.

And despite these price rises, average fuel prices are still below the all-time highs of summer 2022 when petrol peaked at 191.5p per litre and diesel at 199.0p per litre.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The UK is reeling from the biggest shock to its mortgage market since Liz Truss’s mini-budget in 2022, after the Iran war drove up borrowing costs.

New research from data provider Moneyfacts shows how the cost of fixed-rate mortgages has surged over the last month, making it harder for new borrowers to get onto the housing ladder – and meaning those remortgaging face a surge in repayments.

Here’s the details of how the lending environment has changed since the start of March:

1. Mortgage deals rapidly repriced. Average two-year fixed rates jumped +100 bps in a month (4.84% to 5.84%), with five-year fixes up +79bps (4.96% to 5.75%), marking the sharpest rise since autumn 2022.

2. Product choice contracted. Mortgage availability has fallen by a net 1,283 products (17% of the market) in one month, the steepest contraction by market share since the mini-Budget disruption.

3. Shock for remortgage borrowers. Those rolling off older five-year deals are hardest hit, with rates up 300+ bps and repayments rising by £417–£444 per month (£5k+ annually).

4. Affordability deteriorated quickly. Typical borrowers now face £150 extra per month (+£1,777 annually) on a £250k loan compared to costs at the start of the conflict, with higher LTV borrowers seeing increases of up to £167 per month.

5. Lowest rates moved sharply higher. The cheapest 60% LTV two-year fixed rate has risen +109bps (3.51% to 4.60%), as the most competitive deals have been quickly repriced in response to rising funding costs.

Adam French, head of consumer finance at Moneyfacts, says it adds up too the biggest shock since the aftermath of the mini-Budget three and a half years ago.

French explains:

“Average mortgage rates have risen at pace, with two-year fixes increasing by 100 basis points from 4.84% to 5.84% in just one month and five-year fixes up by nearly 80 basis points, from 4.96% to 5.75%. The cheapest deals available to borrowers have moved dramatically too, the lowest two-year fixed rate at 60% LTV has increased by over 100 basis points from 3.51% to 4.60%. While this falls short of the extreme jumps seen in the aftermath of the mini-Budget, it is still a sharp and sudden shift that has materially worsened affordability in a very short space of time.

“For many borrowers, the cost could be significant. Someone taking out a typical two-year fix will find it costs £150 more per month on average compared to just a few weeks ago. However, the real payment shock will be felt by those coming off older five-year deals, where rates have more than doubled, pushing up repayments by many hundreds of pounds per month.

“The combination of rising rates, reduced choice and heightened volatility means borrowers and brokers are operating in a market where timing is critical and the window to secure competitive deals can be very short-lived. Unfortunately, anyone looking to buy or remortgage this year needs to prepare for substantially higher borrowing costs than expected before this conflict began.”

The City money markets had been reducing their forecasts for how many times the Bank of England might raise interest rates this year to cool inflation, from three hikes to less than two, as of last night.

But, Donald Trump has now disappointed markets by declaring the month-long war in Iran a success which is “nearing completion”, but gave little clarity on how he planned to wind down the conflict over the next “two to three weeks”.

That has knocked Asia-Pacific markets, and pushed up the dollar and the oil price, as hopes of an early end to the conflict fade.

The agenda

• 9.30am BST: Bank of England decision makers panel data