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Starmer says UK won’t get ‘dragged into Iran war’ as Labour launches its local elections campaign – UK politics live | Politics
Starmer insists UK won’t get ‘dragged into’ Iran war, highlighting his willingness to resist Trump’s calls for more help
Keir Starmer is speaking now.
He thanks Sarah, and say he has the cabinet with him in the room. There is a lot of energy there, he claims.
Moving into the substance of his speech, he starts by referring to the Ukraine war, praising the courage of the Ukrainians, before move on to the Iran war.
He goes on:
People look at their screens and they’re worried when they see explosions, infrastructure blown up, the rhetoric that goes with it, worried about whether this is going to escalate even further.
And therefore it’s really important that I reiterate where I stand and where this government stands, because this is not our war and we are not going to be dragged into it.
He says this applies “whatever the pressure [to join in] and whoever it’s coming from”.
(Starmer is referring to Donald Trump at this point, highlighting is refusal to comply with Trump’s requests for more military support.)
Starmer says Nigel Farage and Kemi Badenoch both “wanted to go straight in, with both feet, into the war without thinking through the consequences”.
And he criticises Zack Polanski for wanting to leave Nato.
Key events
Starmer ended his speech talking about the NHS, where he named Wes Streeting, the health secretary, as the person leading efforts to improve it.
He said:
This is the thing, I think, that broke all of our hearts is that confidence in the NHS was a record high in 2010 and then it plummeted under the last government because of what they did to the NHS.
Gradually, through the hard work that we’ve put in, the investment we’ve put in, Wes’s leadership, that confidence is going back up because people can see that it matters to us.
We don’t see public services just as a chart of how much money you can save here or there. We see it as something you invest in because they’re vital for people.
This did not sound like the sort of thing that Streeting would say if, as some reports have claimed, he were thinking of sacking Streeting.
If this had been a major launch, with a lot of national media journalists present and Starmer taking questions, someone might have asked about today’s Guardian report saying the NHS is set to miss key targets to shorten waiting times for help at A&E, cancer care and planned hospital treatment.
But it was not that sort of event, and after Starmer’s speech the formal part of the event wrapped up.
Starmer complained about other parties whipping up division, and he specifically criticised Nick Timothy, the shadow justice secretary, for “complaining about Muslims praying in public”.
Labour, by contrast, values bringing people together, he said.
And he highlighted Labour’s Pride in Place programme as an example of that.
He claimed this was an example of Labour trusting people, because under the scheme “you decide what the money is spent on, because you’re going to have a better idea than someone in Westminster or Whitehall, and that’s why it’s Pride in Wolverhampton. Let Wolverhampton decide.”
Starmer refers to Labour’s cost of living measures (see 9.42am), saying that energy bills will start going down this month because of a decision by the government.
Starmer insists UK won’t get ‘dragged into’ Iran war, highlighting his willingness to resist Trump’s calls for more help
Keir Starmer is speaking now.
He thanks Sarah, and say he has the cabinet with him in the room. There is a lot of energy there, he claims.
Moving into the substance of his speech, he starts by referring to the Ukraine war, praising the courage of the Ukrainians, before move on to the Iran war.
He goes on:
People look at their screens and they’re worried when they see explosions, infrastructure blown up, the rhetoric that goes with it, worried about whether this is going to escalate even further.
And therefore it’s really important that I reiterate where I stand and where this government stands, because this is not our war and we are not going to be dragged into it.
He says this applies “whatever the pressure [to join in] and whoever it’s coming from”.
(Starmer is referring to Donald Trump at this point, highlighting is refusal to comply with Trump’s requests for more military support.)
Starmer says Nigel Farage and Kemi Badenoch both “wanted to go straight in, with both feet, into the war without thinking through the consequences”.
And he criticises Zack Polanski for wanting to leave Nato.
Powell introduces “Sarah from Dudley”, who is talking about having two “amazing” adopted twins.
Sarah is talking about the impact of the 30-hour free childcare allowance introduced by Labour. It has saved the family £400 a week, she says. It meant she could return to work full-time, she says.
Powell goes on to make jokes (not particularly good ones) about Nigel Farage and Zack Polanki.
Farage has got a new job as Donald Trump’s intern, she says.
And she says Polanski is making “hypnotic promises” that are “just an illusion”.
Labour launches its English local elections campaign
The Labour local elections launch is starting.
Lucy Powell, the deputy leader, is opening the proceedings.
She starts by saying the party is “immensely proud” of the way Keir Starmer has dealt with the Iran war, and his decision “in the face of a lot of pressure and criticism not to follow blindly into an offensive war”.
In Australia the Labor government has announced that it is halving excise duty on fuel for three months. Only last week Reform UK called for VAT on road fuel to halved for three months. Explaining the policy, Reform UK said:
The tax cut would reduce pump prices by around 12p per litre for petrol and 14p per litre for diesel at current prices, at a static exchequer cost of about £1.5bn. The measure could be funded within current spending envelopes using the estimated £2.7bn windfall from higher oil prices that the chancellor has received.
Tories call for VAT on household energy bills to be removed for three years
At the Conservative party conference last year, the Tories announced plans to cut £165 a year from the average household energy bill by getting rid of the renewables obligation subsidy and the carbon tax.
Today Kemi Badenoch is visiting an oil rig in the North Sea to publicise what the Conservatives are calling their cheap energy plan. In addition to the measures announced last year, they are now proposing removing VAT from household energy bills for three years. They say this would save the average household £94 per year, at a cost of £2.2bn. They say they would fund this by cutting subsisides for renewables.
In a statement issued overnight, Badenoch said:
Labour promised to cut energy bills by £300 but they are still higher than when they took office. Instead, Ed Miliband is blocking drilling in the North Sea during an energy crisis and Rachel Reeves is hiking taxes on working families to pay the energy bills of those on benefits.
The Conservatives would use extra tax revenue from our plan to Get Britain Drilling in the North Sea to cut taxes and ease the cost of living. Our Cheap Power Plan would scrap VAT on energy bills and cut bills by £200 for every family.
Badenoch also says the Tories would “back the North Sea” by allowing new oil and gas drilling licences to be issued, and repealing the windfall tax on energy firms. They claim this would boost tax revenues, which could be used to cut costs for households.
Labour highlights 13 ‘key cost of living measures’ coming into force within next week as it launches local elections campaign
As Jessica Elgot reports in her overnight story on the Labour local elections launch this morning, Keir Starmer will also highlight what Labour is doing to help people with the cost of living.
In his news release issued ahead of the launch, Labour has highlighted more than a dozen measures coming into force within the next week that it says will help people with the cost of living. Here is the list.
Key cost of living measures coming into force on 1 April:
-Prescription charge freeze, keeping prescriptions under £10
-National Living Wage (age 21+) rises to £12.71 an hour – 4.1% increase
-National Minimum Wage (age 18-20) rises to £10.85, under 18 £8, apprentice £8
-Energy bill support – average £117 reduction on household energy bills, applied to all households on top of £150 Warm Homes Discount for millions of low income households.
-Benefits uprating – most inflation-linked benefits to rise by 3.8% (CPI Sept 2025)
-Child benefit increases
-Crisis & Resilience Fund launches (replacing Household Support Fund). New £1 billion per year fund begins April 2026.Offers: Cash‑first crisis payments; Housing payments (replacing Discretionary Housing Payments)
-Healthy Start vouchers increase by 50p a week
Key cost of living measures coming into force on 6 April:
-State pension uplift – increasing by 4.8% rising to £241.30 per week
-Two child limit removed – expected to lift 450,000 children out of poverty
-Statutory Sick Pay rights from day 1
-Day one entitlement to paternity leave and unpaid parental leave
-Universal credit standard allowances receive an additional 2.3% uplift
Starmer to say Iran war means Labour’s values needed more than ever at local elections campaign launch
Good morning. Keir Starmer will today chair a meeting in Downing Street on how the government responds to the economic consequences of the Iran war, which has the potential to upend much of what the government is trying to do to improve living standards. And so he is probably not too happy about the fact that this morning he has to attend an event in the West Midlands launching Labour’s English local elections campaign.
It is a relatively low-key launch. “The Westminster press pack wasn’t invited for a full Q&A,” Politico reports. Starmer will be back in London later for his Iran war meeting.
No one expects Labour to do well in the local elections and last week Stephen Fisher, an Oxford politics professor and an elections expert who works with John Curtice on the widely admired general election exit polls, published his projections for how many seats he expects parties to win and lose in the English local elections, based on current polling and other factors. It is terrible reading for Labour.
As Fisher points out in his blog on this, his equivalent forecast for Labour losses in 2025 turned out to be reasonably accurate.
According to the extracts from his speech briefed in advance, Starmer will not be forecasting success for Labour at the local elections, but he will argue that the war in Iran means that Labour is needed more than ever. He will say:
We’re going to fight to earn every vote. Fight for our values. And fight for the country we are building together, a Britain built for all.
Because, in the context of everything that is happening in the world. Those values – that fairness we stand for – it’s never been more important.
That is the thing about the volatile world we live in now. It tests, not just our security, our strength on the world stage. It is also tests our fairness at home. Our unity.
He will also attack Reform UK and the Conservatives in particular for their initial unqualified support for President Trump’s decision to go to war.
We will protect our forces, our people, our allies in the region. But I made the decision that it is not in our national interest to commit British forces to a war, without a clear legal basis and a clear plan – and I stand by that.
It’s a question of judgement. Do not forget that the Tories and Reform would have rushed us into this. With no thought of the consequences, including for the cost of living. Utterly reckless.
Here is the agenda for the day.
9.15am: Eluned Morgan, the Welsh first minister, launches Labour’s campaign for the Senedd elections.
Morning: Keir Starmer launches Labour’s campaign for the English local elections in the West Midlands.
10.30am: Rhun ap Iorwerth, the Plaid Cymru leader, launches Plaid’s campaign for the Senedd elections.
11.30am: Downing Street holds a lobby briefing.
Afternoon: Starmer hosts a roundtable with business leaders to discuss the impact of the Iran war.
2.40pm: Zack Polanski, the Green party leader, addresses the National Education Union’s conference.
Afternoon: Rachel Reeves, the chancellor, and Ed Miliband, the energy secretary, take part in a virtual meeting with G7 counterparts to discuss the economic impact of the Iran war.
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UK News
World Cup 2026: Fifa urged to remove official over hand gesture; teams hit back at Ceferin; Iran arrive in US – live | World Cup 2026
Key events
More now on the hand gesture story mentioned earlier. Fifa’s discrimination monitor at the World Cup has called for a video assistant referee to be removed for appearing to make a hand gesture resembling a white supremacist sign.
“Advice from our experts is that the gesture used clearly resembles an upside down ‘OK’ hand symbol used as a ‘white power’ symbol in global far-right circles,” the Fare network, a longtime partner of Fifa and Uefa, the European football governing body, to monitor racist and discriminatory chants, flags and symbols at international games, said in a statement. “Clearly this official should have no further role to play in this World Cup,” Fare said in a statement, describing the gesture as “neo-Nazi.”
Kick-off times are more friendly for the UK viewer today. Spain v Cape Verdi at 5pm and Belgium v Egypt at 8pm. But we need to think globally so that’s 3pm for Cape Verdi viewers cheering on their team while in Egypt it’ll be 10pm for those tuning in to see if Mo Salah can inspire his team to victory over the Belgians.
The biggest test for the UK viewer today is Iran v New Zealand at 2am BST. In Auckland, Wellington and Christchurch that’ll be 1pm while in Tehran, Mashhad and Karaj it’s a less palatable 4.30am.
Thanks Sarah. As for World Cup songs, this one from the German 1990 squad always sticks in my mind. While England took the genre to a new level with New Order and John Barnes’ rap, the Germans very much went down the traditional route. A singer that looks like a cross between Chris de Burgh and Thomas Muller, Karl-Heinz Riedle on maracas, one or two playing air saxophone. Pleasingly dreadful.
I am off to grab some food and so I leave you in the hands of Dave Tindall who will take you through the next few hours of news. I’ll be back later on.
From requests of your favourite football songs to another on if you live in a World Cup host city. We want to hear from you if you have football teams in town from the atmosphere to how it is affecting business. Use the form on this page to get in touch:
We have another shout for the best/worst football song and I can’t decide which side of the forward slash this one belongs on. Graeme Neill said:
Timely given yesterday evening’s match. Japan’s Cornelius and his utterly bonkers Ball in Kick Off is worth a listen:
France will kick-off their tournament against Senegal on Tuesday and to say they have attacking quality is an understatement. The team boasts players like the captain, Kylian Mbappé, Ballon d’Or winner Ousmane Dembélé, Michael Olise and Cherki but they all have a role to play, according to Adrien Rabiot. Read more:
Jacob Steinberg
The cat is well truly out of the bag. Nobody expected the conversation to be quite so revealing when Jude Bellingham and Morgan Rogers sat on the Lions’ Den sofa last week. Content controlled by the Football Association was an unlikely place for Bellingham to drop a few truth bombs, but the England midfielder was not minded to hold back when it was time to discuss his experience at Euro 2024.
“It didn’t feel like there was any kind of hierarchy,” the 22-year-old said. “I think at the Euros we got some things a little bit wrong off the pitch. I don’t feel like the group connected as well as it could have – for a number of reasons.”
Read more:
Fifa urged to remove official over hand gesture
Fifa have been urged to remove a video review official who appeared to make a white supremacy hand gesture during Germany’s 7-1 win over Curaçao.
The governing body’s discrimination monitor at the World Cup called for Shaun Evans from Australia to be removed from the tournament.
The gesture was also spotted by several fans who posted about it on social media.
“Advice from our experts is that the gesture used clearly resembles an upside down ‘OK’ hand symbol used as a ‘white power’ symbol in global far-right circles,” the Fare network said.
Fifa are yet to comment on the situation.
There have been some sights at the World Cup but Scotland fans taking over Fenway Park is one that has been one of the most surreal. The Boston Red Sox lost 6-4 to the Texas Rangers but Scotland fans stayed long after the game was over singing “super John McGinn” and during the match there was a rendition of “yes sir, I can boogie”.
Anil Patel has emailed:
This absolute banger wasn’t attached to any particular team but is one of the best themes out there.
This is a great shout and a fun fact for you about it, it was initially written to be a baseball anthem. Some baseball news coming your way soon…
If anyone is unsure of the song I referenced, here it is:
Football songs can be iconic or occasionally cringey, that one with Dizzee Rascal and James Cordon comes to mind for the latter for me. What are your best/worst anthems for a major tournament? Get in touch and let me know.
England may have banished some penalty shootout demons in the last few major tournaments but the question of who would step up to take one is one that will always be asked. One such player who said he would take on is Eberechi Eze, despite missing one in the Champions League final. Have a read of what he said:
There will be many questions raised at this World Cup. Who will win the trophy? Who will claim the Golden Boot? What will the next standout moment be? But there is another question that has been answered in the following piece: Where have the WAGs gone?
Matt Hughes
Fox will not face any punishment from Fifa for breaking the governing body’s advertising rules during the opening game of the World Cup between Mexico and South Africa last week.
The US broadcaster broke Fifa’s strict guidelines for showing commercials during hydration breaks on the first occasion they were in operation by returning to the live action 10 seconds after play had resumed during the second half at Mexico City Stadium.
Fifa’s tournament regulations, which were given to all rights holders two months ago, state that while broadcasters can show ads during hydration breaks they must return to the match 30 seconds before play resumes.
Read more:
Sometimes a team needs a player to have some standout performances to jump start a tournament and Jordan Henderson believes that player for England will be Jude Bellingham. Henderson said:
I’m sure he will have a big impact for us in this tournament. I can remember five years ago I gave him his first cap, it was away at Middlesbrough. How much he’s grown, as a player and as a person since then, is incredible really. I had a good idea when I first saw him playing and training, and the way he was.
I think everybody forgets how young he is. We do rondos and it’s the youngest in, and there’s people that I think should be going in before him, but he’s always one of the first in the middle to go in. It just reminds us how young he is. I honestly couldn’t speak highly enough of him.
Read more:
The travel at this tournament has grabbed more than a few headlines so far and there is another one pertaining to Australia. The Socceroos beat Turkey 2-0 in their opening game with their second against one of the co-hosts, the US, on Friday. Their focus will be on that game but recovery is also high on their list. Read more here:
There have already been so many historic moments at this tournament, including Scotland’s first World Cup win in 36 years. Mo Salah is hoping to replicate the moment and end Egypt’s long wait of 92 years for a victory at the tournament. The team have their first game against Belgium today to try and make history:
Spain, who start their campaign today against Cabo Verde, are among the favourites to win the World Cup after their European Championship success in 2024. Here’s a piece on how the team are embracing the tag and how they are using one trophy-winning tournament to potentially lift another:
Uruguay will take on Saudia Arabia later today but their travel was delayed amid challenges across the tournament.
The team’s initial flight from Mexico was cancelled with their replacment delayed. The Uruguay captain, José María Giménez, described the situation as “difficult”.
Read more:
There are more games to be played today with another four in store. The details for those kick-off times and match-ups are below but do get in touch to let me know what your World Cup routine is. Are you having to get up early to watch the games? Or are you in a time zone where you can get home from work and watch back-to-back football until it’s time for bed? Email me and let me know, here are today’s fixtures:
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Spain v Cabo Verde (5pm BST, 12pm ET, 9am PT)
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Belgium v Egypt (8pm BST, 3pm ET, 12pm PT)
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Saudi Arabia v Uruguay (11pm BST, 6pm ET, 3pm PT)
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Iran v New Zealand (2am BST, 9pm ET, 6pm PT)
So what happened in the matches yesterday? Four took place with the biggest win coming in Germany’s 7-1 dismantling of Curaçao. The island nation will be disappointed with the result but they also made history as they scored their first-ever World Cup goal. That came from Livano Comenencia, who plays his club football for Zürich. Have a read of that report and others for all the latest action on pitch:
Čeferin criticised for ‘uninteresting’ comment
UEFA President Aleksander Čeferin was criticised by multiple nations from Asia, Africa and the Caribbean after reportedly saying the expanded World Cup creates “uninteresting” matches.
According to Zurnal 24, the boss said at a conference last Monday: “We have a huge number of matches that are completely uninteresting.”
The associations of Cape Verde, Congo, Curaçao, Haiti, Jordan and Uzbekistan released a joint statement, which was in solidarity with the federations of Algeria, Egypt, Ghana, Ivory Coast, Morocco, Senegal, South Africa and Tunisia.
It said: “Football does not belong to a select group of nations. Its strength comes from its universality,” the statement said. “For many countries, participation in the FIFA World Cup is not only a sporting achievement. It is a moment that inspires a generation, accelerates football development and creates memories that last a lifetime.”
Ben Fisher
The Iran striker Mehdi Taremi has said the controversy and disruption surrounding their involvement at the World Cup undermines Fifa’s message of peace and conceded he felt the tension before arriving in Los Angeles on the eve of their opener, hours before a peace deal was announced. For the first time since the competition’s inception, a host nation has received a country with which it is at war.
On Sunday Iran flew to LA from Tijuana, Mexico, where they were relocated amid an ongoing row over visas, but are expected to face opposition from Iranians, many of whom believe the national team do not represent the country. Iran has been beset by problems in the buildup to the tournament, with several officials denied entry to the US.
Preamble
Hello and welcome to today’s World Cup news blog where we bring you the latest updates from the global event being hosted across the US, Canada and Mexico.
Any breaking news, team updates or reflections on what has happened so far will be all here for you to feast on, no matter what you are doing with your Monday.
Please do get in touch too, we always like to hear from readers. Potentially on the best underdog story at the World Cup or any quirky predictions you may have for the tournament.
Amongst several stories surrounding the competition today is Iran’s arrival in the US. The team landed on Sunday before they take on New Zealand.
More details on that story will be with you shortly, as well as the reports from the games that took place yesterday to catch up on all the latest action.
The man said his home has been targeted three times in the last five months.
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UK News
European stock markets hit record high and oil price falls to three-month low after US-Iran peace deal – business live | Business
European stock markets hit record high
European stock markets have hit a record high at the start of trading, as relief over the US-Iran peace deal ripples across global markets.
The pan-European Stoxx 600 index has jumped by 0.9% to 639 points, over the previous record high set just before the Iran war started, with shares rising in London, Frankfurt, Paris, Madrid and Milan.
Mining and travel companies are driving the rally, while oil company shares are sliding.
That follows sharp gains in Asia-Pacific markets overnight, where Japan’s Nikkei surged by 5% on hopes that the strait of Hormuz will reopen within days.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, says global equity markets are starting the week firmly on the front foot after President Trump announced that a deal with Iran had been reached, adding:
The move has given investors a clear reason to dial back some of the geopolitical risk premium that has hung over markets, especially as the Strait of Hormuz is expected to reopen and oil prices move sharply lower.
Energy prices have been one of the clearest transmission channels from Middle East tensions into inflation, bond yields and equity sentiment, and there is likely to be a concerted effort to get prices down even further once this deal is finalised.
There are still details to be ironed out before markets can fully trust the agreement, but for now the direction of travel is clear: lower oil, calmer nerves and a renewed appetite for risk.
Key events
Peace deal should keep mortgage rates down
Mortgage borrowers can breathe a sigh of relief at the news of a peace deal in Iran, says Adam French, head of consumer finance at Moneyfactscompare.co.uk.
While we are far from being out of the woods yet, a lasting peace deal should dramatically reduce the risk of the Bank of England’s worst-case scenario for inflation and interest rates becoming a reality.
“Under that scenario, Base Rate could have risen to 5.25%, potentially pushing typical rates on new mortgages towards 6.75%. Instead, today’s news means mortgages rates, which have already been slowly falling for several weeks, have likely already passed their peak – at least until the next unwelcome crisis.
“Borrowers can be optimistic but with a word of caution, as inflation and economic data will continue to influence the outlook. However, a lasting peace should remove one of the biggest risks to mortgage costs and may help restore a more stable environment for hard-pressed remortgage borrowers and prospective buyers.”
Even before this morning’s drop in UK bond yields (see earlier post), average mortgage rates have dipped slightly.
Moneyfacts reports:
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The average 2-year fixed residential mortgage rate today is 5.61%. This is down from 5.62% the previous working day.
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The average 5-year fixed residential mortgage rate today is 5.58%. This is down from 5.59% the previous working day.
Why it may take months for oil flows to return to normal
Donald Trump excitedly declared: “Ships of the World, start your engines. Let the oil flow!” last night, but the reality is that it will take some time for oil flows through the strait of Hormuz to return to pre-war levels.
One reason is that many oil tankers are simply in the wrong place, after the long closure of the strait.
Another is that some production and refining facilities have been damaged by the conflict, while others were mothballed after storate facilities filled up to the brim.
A third factor is that insurers could still be wary of the conflict reigniting, and price their cover accordingly.
Neil Shearing, group chief economist at Capital Economics, explains:
Even if ships now have safe passage, tankers are in the wrong place, oil production/refining facilities need to get up to full capacity, and questions over the cost and availability of insurance for ships traversing the Strait will remain.
Our current working assumption is that ~80% of energy flows will resume by the end of Q3. Natural gas flows will be slower to return, following the damage to Qatari facilities earlier in the conflict, which according to local officials has put 17% of production offline for two to three years.
US crude drops below $80
US crude oil has dropped to its lowest level since the second week of the Iran war.
The cost of a barrel of West Texas Intermediate (WTI) light sweet crude has dropped by 6% today to $79.72 per barrel, the first time since 10 March that it has been under $80/barrel.
That could help to pull down US gasoline prices, which climbed after the conflict began, hitting consumer confidence.
UK bond yields fall
Today’s relief rally is also driving up government bond prices, pushing down the cost of borrowing.
The yield (or interest rate) on 10-year UK government debt has dropped by 6.5 basis points (0.065 of a percentage point) to 4.775%.
Two-year bond yields are down 8bps to 4.16%.
Lower bond yields indicate that that the cost of issuing new government debt has fallen, which will be a relief for the UK Treasury after the Iran war drove up borrowing costs.
Copper mining company Antofagasta is now the top riser on the FTSE 100, up almost 8%.
Trader will be concluding that an end to the Iran war will boost the world economy, leading to more demand for raw materials such as copper.
European stock markets hit record high
European stock markets have hit a record high at the start of trading, as relief over the US-Iran peace deal ripples across global markets.
The pan-European Stoxx 600 index has jumped by 0.9% to 639 points, over the previous record high set just before the Iran war started, with shares rising in London, Frankfurt, Paris, Madrid and Milan.
Mining and travel companies are driving the rally, while oil company shares are sliding.
That follows sharp gains in Asia-Pacific markets overnight, where Japan’s Nikkei surged by 5% on hopes that the strait of Hormuz will reopen within days.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, says global equity markets are starting the week firmly on the front foot after President Trump announced that a deal with Iran had been reached, adding:
The move has given investors a clear reason to dial back some of the geopolitical risk premium that has hung over markets, especially as the Strait of Hormuz is expected to reopen and oil prices move sharply lower.
Energy prices have been one of the clearest transmission channels from Middle East tensions into inflation, bond yields and equity sentiment, and there is likely to be a concerted effort to get prices down even further once this deal is finalised.
There are still details to be ironed out before markets can fully trust the agreement, but for now the direction of travel is clear: lower oil, calmer nerves and a renewed appetite for risk.
BP and Shell’s shares slide
Shares in oil companies are falling, though – BP and Shell are both down 3.7%, as investors anticipate an end to their earnngs boost from the Iran war.
FTSE 100 index hits eight-week high
Boom! Britain’s stock market has hit a near-two month high at the start of trading, as investors welcome the breakthrough between the US and Iran to end the Middle East conflict.
The FTSE 100 blue-chip share index has jumped by 99 points, or almost 1%, at the start of trading to 10,570 points, its highest level since 21 April.
Engineering firm Rolls-Royce, which makes and services jet engines, is the top riser on the FTSE 100, up 5.5%, followed by British Airways parent company IAG, up 4.8%.
UK house prices dip in June
Gwyn Topham
Two bits of good news for Britons who don’t own their homes have been revealed, with data showing a drop in house prices in June as well as fewer tenants facing rent hikes last month.
Figures from Rightmove showed the average price of property coming on the to market fell by 0.6% or £2,113 to £376,191, the biggest June fall in fourteen years, with prices 0.5% below this time in 2025. The biggest drops were seen in southern England and Wales, and in asking prices for flats rather than houses.
The property site said the number of homes for sale was still at historically high levels for summer, making it more of a buyer’s market. Mortgage affordability has also improved slightly this month, with the average two-year fixed rate deal dropping about 0.1 percentage points to 5.07%, it said.
Meanwhile, figures suggest that the introduction of the Renters Right Act may already be seeing results in terms of keeping rents down for tenants.
The new law came into force at the start of May and means landlords can only increase rents for sitting tenants once a year. According to Hamptons monthly lettings index, the number of tenants who saw their rent rise was down 23% from the same month last year. Hamptons said if the rest of the year saw similar change, it would expect only 31% of sitting tenants to face increases, compared to 40%-50% in previous years.
However, the agency warned that rent rises in Scotland, where landlords have been operating under a similar system for longer, exceeded the national average. Sitting tenants who faced rent rises had an average increase of 5.4% in May, but the figure reached 7.7% in Scotland, albeit for a lower absolute rent – £952 – than the Great Britain average of £1375.
Speaking of the ECB, their president Christine Lagarde has been warning that inflation pressures are spreading in the euro area.
In an intervew with broadcaster France Culture, Lagarde warned that high energy prices are starting to feed through to other parts of the economy, saying:
“Indirect effects of inflation, we have absolutely started to see that more or less everywhere in recent weeks.”
The US-Iran agreement is well-timed for the Bank of England, which is due to set UK interest rates on Thursday.
If the strait of Hormuz does reopen, and oil flows return towards pre-war levels, there will be less inflationary pressure – and thus less need for interest rate rises.
The European Central Bank raised its interest rates last week, but this week is the turn of the BoE, the US Federal Reserve and the Bank of Japan.
Kathleen Brooks, research director at XTB, says:
Over the past month, the price of oil is down by more than a fifth, and the Brent crude price is now back at levels from early March. This is good news for inflation, which should start tumbling monthly from June, and it could ease concerns about price pressures as we lead up to some major central bank action this week. The decline in the oil price also raises questions about whether the ECB was too hasty in raising rates last week.
European stock markets are on track to jump when trading begins, in just over 20 minutes.
Germany’s DAX share index is up 1.65% in the futures market, Reuters reports, with the UK’s FTSE 100 0.75% higher.
The US dollar is weakening, as investors shift into riskier currencies.
The pound is its highest in over a week, at $1.3438.
Markets rally across Asia
There are strong gains across Asia-Pacific markets today, as investors welcome the deal between the US and Iran.
Japan’s Nikkei share index has leapt by 5%, as has South Korea’s KOSPI, while China’s CSI300 index is 1.9% higher.
Jim Reid, market strategist at Deutsche Bank, says:
Whilst the deal is very good news for markets it looks like tough conversations will have occur in the 60-day window to ensure the peace is sustainable. As an example, the Senate needs to approve any extensive sanction relief for Iran.
For now the can kicking exercise has been very well received by markets even after a strong US close on Friday where hopes were raised of a weekend signing
Introduction: Oil falls to three-month low
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
The peace deal agreed between Iran and the US is sending a wave of relief through the markets today.
Oil has tumbled 4%, and markets across the Asia-Pacific region have jumped, as investors anticipate the reopening of the strait of Hormuz.
Although it is unclear exactly what has been agreed – with the final text of their memorandum of understanding unpublished – Donald Trump’s claim that “oil will flow on both ends again for the region, and the world” is pushing down energy prices – a relief for busineses, consumers, politicians and central bankers alike.
Brent crude has fallen as low as $83.04, its lowest since 10 March, after the prime minister of Pakistan announced the US and Iran will sign a memorandum of understanding in Switzerland on Friday.
That still leaves Brent above its pre-war price of $72.48 a barrel, though.
Trump has indicated that the opening of the strait is contingent upon the signing of the peace deal, scheduled for Friday.
Iran’s Mehr state news, though, reported that the agreed memorandum of understanding calls for the reopening of the strait within 30 days under “Iranian arrangements” – an indication that Tehran hasn’t surrendered its control of the waterway.
Chris Weston of IG points out that there are still obstacles to overcome:
The probable reopening of the Strait of Hormuz later this week would represent a significant positive development. Markets had increasingly questioned how long inventory draws could offset supply disruptions and whether physical dislocations would begin weighing more heavily on risk assets. The focus now shifts towards understanding what normalisation of logistics could realistically look like, and how quickly shipping volumes can return to pre-conflict levels of 120 to 140 commercial vessels transiting eastbound and westbound each day.
There are still obstacles to overcome. Mines may need to be cleared, and there may be structural damage to refineries and export facilities around the region that will take time to repair and come back to pre-conflict capacity.
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