Oil prices soar after Israel launches strikes on Iran's capital
London's FTSE 100 Index dropped 0.6%, down 56 points to 8828.6, in early morning trading on Thursday after heavy overnight losses on Asian stock markets as the worries spooked investors.
The strikes by Israel on Iran's capital Tehran early on Friday are said to be the most significant attack the country has faced since its 1980s war with Iraq and have led to concerns over an all-out conflict between the two Middle Eastern countries.
In Washington, the Trump administration said it had not been involved in the attack and warned Iran not to retaliate against US interests or personnel.
It threatens disruption to the supply of crude from the Middle East while some traders flagged concerns it could also impact the flow of liquified natural gas (LNG) if tensions escalate.
Rising oil prices could threaten to push up inflation in the UK, possibly impacting the outlook for further interest rate cuts.
The Bank of England has been cutting rates but, as inflation strays further from the 2% target, it has less leeway to bring down borrowing costs.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: 'It's not just the outlook for Iranian exports that's a concern but also the potential for disruption to shipping in the Persian Gulf's Strait of Hormuz, a key route for about 20% of global oil flows and an even higher proportion of liquified natural gas haulage.'
He added: 'The escalation of military action adds another factor to consider for central bankers in an already complex world as they weigh up the inflationary impact of ever-changing tariff rates and a weakening outlook for jobs and growth.'
On the London market, oil giants BP and Shell were among the biggest risers on the steep gains in the cost of crude, with shares up 2% for both firms.
Aerospace giant BAE Systems was also moving higher as the threat of a full-scale war in the Middle East put defence stocks back in the spotlight, with the stock up 3%.
But London-listed airlines were down sharply, hit by a double whammy as rising oil prices spell higher fuel costs for the sector and following the devastating air crash in India.
British Airways owner International Consolidated Airlines fell more than 4% and easyJet was just under 4% lower in morning trading.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NBC News
2 hours ago
- NBC News
Trump says national security concerns in Nippon-U.S. Steel deal can be resolved
U.S. President Donald Trump said on Friday that concerns over national security risks posed by Nippon Steel's $14.9 billion bid for U.S. Steel can be resolved if the companies fulfill certain conditions that his administration has laid out, paving the way for the deal's approval. Shares of U.S. Steel rose 3.5% on the news in after-the-bell trading as investors bet the deal was close to done. Trump, in an executive order, said conditions for resolving the national security concerns would be laid out in an agreement, without providing details. 'I additionally find that the threatened impairment to the national security of the United States arising as a result of the Proposed Transaction can be adequately mitigated if the conditions set forth in section 3 of this order are met,' Trump said in the order, which was released by the White House. The companies thanked Trump in a news release, saying the agreement includes $11 billion in new investments to be made by 2028 and governance commitments including a golden share to be issued to the U.S. government. They did not detail how much control the golden share would give the U.S. Shares of U.S. Steel had dipped earlier on Friday after a Nippon Steel executive told the Japanese Nikkei newspaper that its planned takeover of U.S. Steel required 'a degree of management freedom' to go ahead after Trump earlier had said the U.S. would be in control with a golden share. The bid, first announced by Nippon Steel in December 2023, has faced opposition from the start. Both Democratic former President Joe Biden and Trump, a Republican, asserted last year that U.S. Steel should remain U.S.-owned, as they sought to woo voters ahead of the presidential election in Pennsylvania, where the company is headquartered. Biden in January, shortly before leaving office, blocked the deal on national security grounds, prompting lawsuits by the companies, which argued the national security review they received was biased. The Biden White House disputed the charge. The steel companies saw a new opportunity in the Trump administration, which began on January 20 and opened a fresh 45-day national security review into the proposed merger in April. But Trump's public comments, ranging from welcoming a simple 'investment' in U.S. Steel by the Japanese firm to floating a minority stake for Nippon Steel, spurred confusion. At a rally in Pennsylvania on May 30, Trump lauded an agreement between the companies and said Nippon Steel would make a 'great partner' for U.S. Steel. But he later told reporters the deal still lacked his final approval, leaving unresolved whether he would allow Nippon Steel to take ownership. Nippon Steel and the Trump administration asked a U.S. appeals court on June 5 for an eight-day extension of a pause in litigation to give them more time to reach a deal for the Japanese firm. The pause expires Friday, but could be extended.
The Independent
2 hours ago
- The Independent
Three union leaders included in King's Birthday Honours
Three trade union leaders have been included in the King's Birthday Honours for services to areas including education and green jobs. Dave Ward, long-serving general secretary of the Communication Workers Union (CWU) is made a CBE for services to trade unions, and Dr Patrick Roach, who recently retired as general secretary of the NASUWT teachers' union is made a CBE for services to education. Sue Ferns, deputy general secretary of the civil service union Prospect, is made an OBE for services to green jobs and workplace transition. Mr Ward has been general secretary of the CWU for a decade, leading the union through the privatisation of Royal Mail and recent sale of the postal giant to Czech billionaire Daniel Kretinsky. He started work as a messenger boy at Tooting delivery office in south London before becoming a union rep, holding several positions before succeeding Billy Hayes as general secretary in 2015. He is married with four children, supports Chelsea and is a keen blues guitarist. He told the PA news agency: 'The New Deal for Workers campaign was founded and led by the CWU. 'At a time when society has never been more unequal the trade union movement pushing Labour to turn this campaign into a new Employment Rights Bill could not have been more important. 'This honour is recognition of our union's work in this area and for the way we stand up for postal, telecom, financial services and tech workers across the UK. 'I joined the GPO as a telegram boy in 1976 and it is a privilege to now be the general secretary of a union that campaigns for our members in and out of the workplace. 'We now need employers and the Government to go even further in rebalancing workplaces and society. We will continue to lead this.' Dr Roach stepped down as NASUWT general secretary in April after five years. The son of Jamaican immigrant parents, he grew up in Walsall, West Midlands, in the 1970s, and has described how he faced racism at school on a daily basis. He is married with two children. He was a teacher of politics and sociology in further education and was a researcher and lecturer in education, social policy and equalities in higher education. He later joined NASUWT and headed the union's education and equalities work before becoming assistant general secretary and then deputy general secretary. He has served in a number of voluntary roles as a school governor and in supporting the provision of supplementary education for African Caribbean children. Dr Roach became head of the union in 2020 at the start of the first national lockdown, leading union members in uncharted territory as schools and colleges, teachers and headteachers adapted to one of the most challenging post-war periods in education. As head of the TUC's anti-racism taskforce, Dr Roach was instrumental in leading Britain's trade union movement in challenging racism and injustice at work. He told the PA news agency: 'I am humbled and incredibly proud to be granted this honour. 'It has been my privilege to have been afforded the opportunity to devote my career to education and in the service of NASUWT members, teachers and headteachers, whose commitment, work and dedication every day continues to inspire, shape lives and make a world of difference.' Sue Ferns, who has also been a member of the TUC General Council since 2005, grew up in Sheffield, South Yorkshire, and was the first member of her family to go to university, studying industrial relations at Salford University. After graduating in 1982, she started working for the TUC's economics department. She joined Prospect in 1993, becoming head of research in 2002, director of communications and research in 2013, and senior deputy general secretary in 2018. She has campaigned on issues including the gender pensions gap, workers' rights in the science, engineering and energy sectors, and clean energy. She has taken part in several government taskforces and working groups, particularly on clean energy jobs and workforce skills. She told the PA news agency: 'I am privileged to have spent my career in the trade union movement, determined to make a positive difference to the lives of working people. 'I'd like to thank the countless colleagues, trade union representatives and members within our movement, whose commitment to improving the lives of others has been an inspiration throughout my career.'
Daily Mail
2 hours ago
- Daily Mail
Reeves faces welfare revolt after Labour rebels rejected an 'olive branch' designed to head off a Commons mutiny over benefit cuts
was on collision course with Labour welfare rebels last night after they rejected an 'olive branch' designed to head off a Commons mutiny over benefit cuts. The Chancellor is facing a ferocious backlash from her own MPs over plans to trim £5 billion from the benefits bill. More than 100 Labour MPs have warned party whips they could vote against the plan to restrict eligibility to disability benefits. Ministers are trying to contain the rebellion by suggesting possible concessions. Under one proposal, those affected would continue to receive their benefits for a further 13 weeks to give them more time to find a job. The compromise is set to be included when the legislation needed to push through the cuts is published next week. But leading rebels dismissed the idea. Poole MP Neil Duncan-Jordan said the proposal was 'not a concession' as it was already included in a government consultation on the cuts. Mr Duncan-Jordan, a long-time anti-poverty campaigner, said the cuts would 'make disabled poorer'. He added: 'No amount of warm words mask the reality - cuts don't create jobs they create austerity. I'm voting No.' Fellow rebel Rachel Maskell said: 'I'll have to vote against something which will cause such harm to my constituents - too many lives will be put at risk if they press ahead.' Ms Reeves used the £5 billion package of benefit cuts to help balance the books when she gave her spring statement on the economy in March. Without them she would have been at risk of breaking her own fiscal rules set just five months earlier. Economists say the cuts will hit 1.2 million people, with those affected losing an average of around £4,500 per year each. The government's own impact assessment suggested the changes would drive 250,000 people into poverty, including 50,000 children. But Ms Reeves signalled she will not back down further, despite her recent U-turn on cuts to the winter fuel allowance. Ruling out a climb down, she said reform was needed to prevent the welfare system becoming unsustainable. 'It is important we reform the way the welfare state works so there is a welfare state there for people,' she said. 'We are the only developed country where the number of people in the labour market is lower than it was before Covid. The number of economically inactive people of working age is rising.' The Chancellor said sickness benefits are forecast to rise sharply despite the cuts, with official estimates suggesting they will reach almost £100 billion a year by the end of the decade.
