HL commentary as it happens

Oil reclaims $100 as uncertainty kicks in

Oil markets are higher once more, with Brent and 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.

Global markets react to Donald Trump’s live address

Global markets took 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. 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.

The latest British Chambers of Commerce business confidence survey shows a dip even before the Iran war

The double whammy of energy and labour costs rising has also impacted business confidence, the British Chamber of Commerce quarterly economic survey reveals. Surveyed before the outbreak of war in Iran, businesses were divided on whether the next 12 months would prove positive; as today’s minimum wage and national living wage hikes came into effect, and policy uncertainty weighed on investment decisions.

In recent years, UK businesses have faced rising energy and input costs, an increase in employer NICs contributions as well as wage increases. Despite these domestic headwinds it is worth noting that the FTSE 100 had one of its best years on record in 2025 – rallying more than 20% and outperforming even the S&P 500. The international nature of the UK stock market, which gets 70% of its revenues from overseas, as well as sector biases towards banking, defence and oil and gas firmed helped buoy the market. A reminder to investors that while domestic policy matters for GDP growth and economic stability, global factors play a much biggest part in determining asset price returns.

The IPPR reveals that the UK is lagging G7 peers when it comes to business investment

The Institute for Public Policy Research (IPPR) has revealed that UK businesses invest around 11% of GDP annually, less than all the other G7 nations bar Canada. This lack of investment is expected to impact both productivity and the growth potential of businesses and the economy. It is particularly acute in the manufacturing sector, where we are nearly 50% behind the rest of the G7. This productivity lag is a long-term trend for the UK, which has struggled to keep pace with peers following the global financial crisis, compounded by Brexit. Budget uncertainty over the past two years has also slowed business decisions, as have rising energy and labour costs – even before the war in Iran.

Asia markets have continued the S&P 500 optimism, rising on hopes of the Middle East war ending

Markets paint an optimistic picture this morning – choosing to believe the optimism from the White House that the war in Iran will be over in a couple of weeks. US President Donald Trump yesterday announced that he saw the war ending within a couple of weeks, and that he would be addressing the nation with further details later today.

This was enough to propel the S&P 500 into a relief rally, up 2.9%, the best day for the market since May last year. Asian markets have continued the optimism early today, with the Hang Seng in Hong Kong up nearly 2%, and the Nikkei in Japan jumping 4.56%.

Brent Crude little moved at around $107 per barrel

Brent crude oil prices have come off the top a little, sitting at about $107 per barrel, after Donald Trump suggested he may be considering an early end to military action, but it’s hard to tell if that’s fact or bluff, as around 2,500 US paratroopers arrived in the region, and rumours of a mission to capture the strategically important Kharg island continue to circulate.

US stock futures rise

US stocks futures are up, implying a rebound from Monday’s dip at the open. Events in the Gulf continue to drive sentiment, but one economic data point that could move the dial today is the Conference Board Consumer Confidence Index, which is expected to have weakened from 91.2 in February to around 88.0 as US shoppers weigh up the impact of gasoline prices crossing the $4 for a gallon for the first time in three years.

UK real GDP growth confirmed at 0.1% for Q4 2025

Confirmation that the UK economy barely grew in the final quarter of 2025 (real GDP +0.1%) hasn’t upset the apple cart, but the potential for activity to dip won’t be lost on the Treasury as the Chancellor battles to balance the books. Overseas borrowing as a percentage of GDP grew from 1.6% to 2.5% in the space of a quarter. With 10-year gilt yields at their highest levels since 2008, that will make uncomfortable reading for Rachel Reeves, as central banks hold off further rate cuts until the inflationary impact of the Middle East conflict and oil price spike becomes clearer. As it stands, markets expect UK rates to rise before loosening can start again.