The day began with US President Donald Trump telling reporters that he could be pulling troops out of Iran, with or without a deal, in the next couple of weeks.
While his comments eased oil prices, officials in Brussels and Westminster have been warning of long-lasting economic impacts, as inflation figures across key sectors look set to rise.
End in sight?
Speaking in the White House’s Oval Office, Trump told reporters that the US will leave Iran in “two to three weeks”, regardless of whether a deal is in place. He added that the US military would leave when they’re sure Iran wouldn’t be able to build a nuclear weapon “for years”.
In comments made about the war in Iran to the FT, published Sunday, Trump claimed that the US military has “about 3,000 targets left — we’ve bombed 13,000 targets — and another couple of thousand targets to go”.
After disclosing the updated timeline, global oil benchmark Brent Crude fell to just over US$100 per barrel, having hit US$119 yesterday (31 March) – one of the highest figures since the war began on 28 February.
Posting on X, Iranian parliament's National Security Committee chair Ebrahim Azizi said the Strait of Hormuz – the Iranian-controlled waterway through which 20% of the world’s oil is shipped – would “certainly reopen but not for you”.
Starmer speech
UK prime minister Sir Keir Starmer announced that foreign secretary Yvette Cooper is set to host an international summit to discuss how access to the Strait of Hormuz could be restored.
At a press conference held this morning he also warned that the UK should be prepared for long-term economic pain as a result of the war.
Starmer told the public “this will not be easy”, adding that support would be put in place to help businesses and households.
He added that the crisis also highlights how the UK’s “long-term national interest requires closer partnership with our allies in Europe and with the EU”, repeating comments made by chancellor Rachel Reeves, that enhancing the UK relationship with the EU is one of the three key strategies necessary to secure greater growth and economic security.
The opportunities to “strengthen our security and cut the cost of living” cannot be ignored, Starmer told reporters.
He later said that the UK will host a meeting of 35 nations “later this week” to discuss how to re-open the Strait of Hormuz.
“[Cooper] 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.”
UK cost-of-living concerns
The UK government also continues to evaluate the best response to economic fallout from the war.
Reeves will meet heads of leading supermarket like Sainsbury’s, Tesco and Morrisons to discuss how the conflict is set to hit shoppers’ bills.
The Guardian reported that the Treasury has described the engagement as “a fact-finding, open discussion”, with the aim of understanding the impact on the cost-of-living in the coming months.
The Food and Drink Federation (FDF) already has a strong steer on how the crisis will impact the public. Having forecast food inflation of 3.2% for 2026 last year, it revised its estimate up to 9-10% in response to the war.
In a press release published today, FDF chief economist Dr Liliana Danila said that the food and drink sector was especially exposed to the crisis, facing rising costs for energy bills, packaging and supply chain disruption. The combinations of all these pressures once are “a significant challenge for businesses to absorb,” she said.
“The current situation is unprecedented and hard to predict, however given the scale and speed of these cost increases, and despite companies’ best efforts not to pass price increases on, it’s clear that food inflation is going to rise in the months ahead.”
Energy fallout
Top EU officials are also preparing for long-term energy ramifications from the war, with warnings of lasting consequences to the European economy and the public urged to take steps to reduce energy consumption.
After a meeting of the EU’s 27 energy ministers yesterday Brussels’ energy chief Dan Jørgensen warned that were the war to end tomorrow, “still we will not go back to normal in the foreseeable future”.
He urged the public to follow International Energy Agency advice: work from home, limit driving and driving speeds.
“The more you can do to save oil, especially diesel, especially jet fuel, the better we are off.”
Longer-solutions to increasing energy security, such as the need for greater renewable energy sources and nuclear power were also discussed.
German chancellor Friedrich Merz told reporters on Monday that if there’s no end to the war soon, the economic toll on Europe could be “as heavy as we recently experienced during the Covid-19 pandemic or at the start of the Ukraine war”.
Experts have also begun invoking the 1970s energy shock, during which Organization of the Petroleum Exporting Countries (OPEC) nations embargoed oil supplies to western US allies during the Yom Kippur war, to contextualise the seriousness of the situation.
While oil prices have risen up to 70% over the past month, global energy prices quadrupled during the 1970s oil crisis.
Yet earlier this week, former Maersk director Lars Jensen told the BBC the economic impact of the current US-Israeli war in Iran could be “substantially larger”.
Product safety consultation
The UK government has launched a new consultation inviting responses on the existing product safety framework.
In a press release published yesterday (31 March), the Office for Product Safety Standards and the Department for Business and Trade (DBT) noted that there’s currently over 150 pieces of legislation on product safety across a range of products and technical standards, with many covered by multiple laws.
According to the release, “this complexity makes swift and consistent action difficult for relevant authorities, and can cause delay and confusion for businesses”.
The government also said that businesses have raised concerns about “an over-reliance on criminal offences for breaches” and called for a “more flexible, proportionate approach” to enforcement.
Firms can respond to the consultation on product regulation enforcement, alongside a companion review on the “new core product safety framework”.
Elsewhere in the headlines
- The US is pushing for Europe to join its “Pax Silicia” network for AI and semiconductor chips in the race to sustain tech dominance over China, as Politico reports one US official’s harsh words on the matter
- While Brussels ups the rhetoric on renewables and nuclear, the Guardian reports that the use of carbon-intensive “dirty fuels” is up across Asia as a result of the Iran war
- Amanda Brooks CBE has been appointed as DBT interim permanent secretary. She was previously the director general for trade negotiations at DBT, and takes over on an interim basis from Gareth Davies, who has moved to head the Home Office
Yesterday in Trade
- Apple was fined for breaching UK Russian sanctions regime
- Trump suggested he’d be prepared to end the Iran war without opening the Strait of Hormuz
- British farming groups warned of an uptick in prices of common vegetables
