Client Update - 24th April 2026

Since I last wrote, economic news continues to be dominated by Middle Eastern tensions, much to the relief of our Prime Minister who would otherwise be front and centre of just about every newspaper, every day this week. He must have thought a few months ago that he was through the worst of his political nightmare. Apparently not.

Since stories concerning a resolution to the Iranian conflict surfaced two weeks ago and markets surged, the last fortnight has reflected the deepening impact of the Iran conflict on supply chains, energy markets, and business confidence. It should not be a surprise that input prices have surged sharply as factories face higher energy related costs and these pressures have contributed to downgrades in growth expectations in some regions.

Oil prices climbed back toward $105 per barrel after Iran seized vessels in the Strait of Hormuz, prompting declines in global equities and a rise in government bond yields as investors reassessed inflation risks. European indices fell modestly, while Asian markets, which had recently hit record highs, also retreated. The U.S. dollar strengthened slightly as investors sought safety, yet it remains a difficult time for a currency that usually thrives amid geopolitical tensions. Simply put, people just don’t trust Trump, and he wasn’t just talking markets this week. He has even urged Fifa to replace Iran with Italy at this summer’s football world cup to mend strained US–Italy relations. Italy failed to qualify, while Iran insists it will compete despite security concerns. Trump appears to believe his influence has no boundaries.

Trump has continued his posturing around the Strait of Hormuz, stating that it is “highly unlikely” the U.S. will renew the existing two week ceasefire with Iran, which is due to expire imminently. He confirmed that U.S. negotiators, including the Vice President, are travelling to Pakistan for further talks, though Iran has not committed to attending. Trump also claimed he is “permanently” reopening the Strait of Hormuz, asserting that China and the wider world support this move. Despite his bravado, reports indicate Iran continues to block attempts to secure the waterway, targeting more than 20 tankers in recent days. Trump has so far avoided using direct military force to reopen the strait, though the U.S. is preparing to deploy thousands more troops to the region.

The UK continues to publicly distance itself from Trump’s strategy and Prime Minister Starmer’s credibility has never been lower as the Mandelson vetting scandal continues to run. The British Armed Forces confirmed they will not participate in the U.S. blockade, despite Trump’s suggestion that “other countries” would join. Tensions between London and Washington have risen, with Trump criticising the UK Prime Minister’s stance on the conflict and comparing it to historical appeasement. Those in glass houses and all that.

Despite these headwinds, U.S. labour market data remains encouraging. Jobless claims fell to 207,000, signalling continued low levels of layoffs even as inflation pressures persist. Although elevated fuel prices have pushed U.S. inflation higher, consumer spending and hiring remain resilient, helping to stabilise sentiment.

There have also been pockets of positive momentum. In the U.S., equity markets recently notched record highs, supported by strong earnings and the search for any signs of Middle Eastern de escalation. Manufacturing activity in regions such as New York and Philadelphia have strengthened, with new orders and shipments improving.

Looking ahead, the next three months could offer a more constructive backdrop. If diplomatic efforts continue and the Iranian conflict stabilises, energy prices may ease further, reducing inflationary pressure and allowing central banks to shift toward a more supportive stance. Combined with resilient labour markets, improving manufacturing data, and strong corporate earnings in key sectors, this sets the stage for a potentially brighter period for pour portfolios. We can but hope. Do have a good weekend.