The UK economy grew 0.1% in May, driven by the service sector, despite falls in production and construction, with analysts noting fragility amid the Iran war's impact on energy prices and supply chains.
The IMF has raised its UK growth forecast to 1% for this year, making it the third fastest-growing G7 economy in 2026. This upgrade comes amid hopes the economic impact of the Iran conflict may be less severe than feared, with oil prices stabilizing and inflation easing.
The Bank of England forecasts that over 5 million homeowners will see increased mortgage bills by end-2028, a rise of 1 million from previous estimates, due to the impact of the Iran war. While the hit won't be as severe as recent years, typical monthly bills could increase by £45.
The UK economy contracted by 0.1% in April, driven by a 0.2% fall in services, particularly sports and recreation, partly due to Middle East conflict impacts. Economists expected this contraction, which follows months of growth. Rising energy costs are a key concern.
The UK economy shrank by 0.1% in April, official figures show, as rising energy prices due to the Iran war and the closure of the Strait of Hormuz impacted growth. Services output declined, while construction saw a slight rise.
European stocks rose Tuesday, with the Stoxx 600 up 0.7%, as markets awaited economic data on the U.S.-Iran war's impact. Investors also watched for euro zone inflation figures and ECB rate hike expectations.
NRI bank deposits in India fell by nearly $2 billion in March due to geopolitical uncertainty linked to the Iran war, with withdrawals exceeding fresh deposits, particularly in NRERA and NRO accounts.
US acting Navy Secretary Carlos Del Toro reportedly stated Taiwan arms sales were paused due to the Iran conflict. However, US sources deny this, stating President Trump will soon decide on new sales, unrelated to military actions against Iran. Legislator Hsu Chiao-hsin urged Taiwan's government to clearly convey its stance.
China's major airlines, particularly the 'Big Three', are experiencing significant stock drops and projected net losses in 2026 due to soaring jet fuel prices following the Iran war. Unlike global peers, they have limited fuel hedging, making them vulnerable to price hikes and a price-sensitive domestic market.
EasyJet reported a 27% increase in losses to £377 million for the six months to March, citing the Iran war's impact on jet fuel costs and booking visibility. Revenue rose 12% as the airline hedged against fuel price rises.
US employers added a robust 115,000 jobs in April, surpassing expectations despite global economic uncertainty from the Iran conflict. The unemployment rate held steady at 4.3%. Healthcare and transportation sectors saw significant hiring, while manufacturing experienced job cuts. This resilient labor market suggests the Federal Reserve may hold off on interest rate cuts as inflation remains a concern.
Cap of 20mph in towns and cities and 60mph on motorways would cut fuel demand and combat rising prices, IPPR saysBritain should lower speed limits for drivers as part of a package of measures to reduce the impact of the Iran war on consumers, a thinktank has said.Capping legal speeds at 20mph in towns and cities and 60mph on motorways would help reduce fuel demand and combat soaring oil prices triggered by conflict, according to the Institute for Public Policy Research (IPPR). Continue reading...
Hindustan Unilever Limited reported its fastest sales growth in three years with a 7% year-on-year increase to ₹16,207 crore in the March quarter, driven by stable consumer demand and supportive economic measures. Volume growth stood at 6% while profit after tax rose 4% to ₹2,711 crore. However, the company warned of potential price hikes due to surging crude oil-linked commodity costs stemming from the Iran war.
The U.S. economy grew at a 2% annual rate in Q1 2026, up from 0.5% in the previous quarter, driven by strong consumer spending and rebounding government spending. Tax refunds averaging $330 larger than last year boosted lower and middle-income households, though the conflict with Iran continues to push oil prices to four-year highs, threatening inflation.
For RBI the situation is clear: The resilience of the global economy, already inflicted with trade tensions, is being tested by the conflict in West Asia. The biggest takeaway from the RBI bulletin is that India’s domestic supply chains may come under risk from a prolonged war scenario, though strong macroeconomic fundamentals provide a buffer.
Chancellor Rachel Reeves is considering imposing a one-year rent freeze on private sector homes in England as part of a major cost of living package. The measure, which would ban landlords from raising rents for a limited period, represents a significant reversal from her previous stance against rent controls. Ministers are increasingly worried about the impact of the Iran conflict on mortgages and household budgets, with Labour expecting heavy losses at next month's local elections and economists predicting a surge in inflation.
UK government borrowing fell to £132bn in the year to March, the lowest since 2022-23 and slightly below forecasts. However, analysts warn the outlook is deteriorating due to the Iran war's impact on energy prices, with borrowing expected to rise to around £145bn this year. The IMF predicts the UK will be hardest hit among advanced economies, cutting growth forecasts to 0.8%.
UK government borrowing fell in the last financial year, but economists warn that the Iran war will likely drive borrowing higher and slow growth. Multiple UK companies have issued profit warnings, and service sector costs have seen their largest jump in 30 years.
UK government borrowing fell to £132bn in the year to March 2026, the lowest since 2022-23 and £19.8bn less than the previous year. However, analysts warn borrowing could rise to £145bn this year due to the energy price shock from the Iran war, which has disrupted the Strait of Hormuz and threatens to increase inflation and require additional household support estimated at £20bn. The IMF predicts the UK will be the hardest hit among advanced economies, cutting growth forecasts to 0.8%.
UK government borrowing fell by £19.8bn to £132bn in the year to March, slightly below the £132.7bn predicted by the Office for Budget Responsibility. However, analysts warn borrowing will rise to around £145bn this year due to the energy price shock from the Iran war, with the IMF predicting the UK would be hit hardest among advanced economies. Interest payments are expected to increase by £12bn, with potential additional borrowing needed for household energy support.
ServiceNow CEO Bill McDermott told CNBC the Middle East delays tied to the Iran war are a timing issue, not demand deterioration. The software company's Q1 subscription revenue grew 19% constant currency despite a 75 basis point headwind from delayed Middle East deals. Shares fell 13% after hours though results beat Wall Street expectations. McDermott also pushed back on AI disruption concerns, calling it a 'tailwind' for the company.
Moody's Ratings lowered India's FY27 growth forecast to 6% from 6.8%, citing weaker private consumption and softer industrial activity due to higher energy and input prices from the Iran war. Elevated energy costs are expected to widen the trade deficit and increase fiscal pressures from higher fuel and fertiliser subsidies. However, government infrastructure spending and strong forex reserves offer some cushion. GDP growth is projected at 7.6% for FY26.
As the U.S. and Israel’s war with Iran squeezes global oil supplies, travelers have valid reasons to worry about the cost and availability of flights as they plan their late spring and summer trips
