Brent crude rose as high as $116.89 a barrel earlier today, and is now trading 1.4% higher at $114.21 a barrel.

US Treasury secretary Scott Bessent sounded optimistic when he talked about a reopening of the Strait of Hormuz for passage of cargo ships, and said the administration is moving to address the shortage of global oil supplies.

Bessent said in an interview on Fox News.

Over time, the US is going to retake control of the strait, and there will be freedom of navigation — whether it is through US escorts or a multinational escort.

Bessent said the global oil market is “in deficit about 10m to 12m barrels a day, and we’re making up for that deficit.”

The International Energy Agency’s coordinated release of strategic reserves amounts to about 4m barrels a day towards that deficit, he said.

Carsten Brzeski, global head of macro at ING, said the jump in German inflation to 2.8% in March “shouldn’t be a surprise to anyone” as the war in the Middle East entered its fifth week, and both energy prices and uncertainty remain high.

While the national inflation measure came in at 2.7% year-on-year, from 1.9% in February, the European measure surged to 2.8% from 2%. At 1.2% month-on-month, March saw the largest monthly price increase since 2022.

At the same time, however, today’s numbers also showed that for the time being, the inflation shock remains limited to energy prices as core inflation and services inflation remained unchanged at 2.5% and 3.2% respectively.

Oil prices have always been the most important and direct link between geopolitical developments and the real economy. While the war in the Middle East and the blockade of the Strait of Hormuz provide further evidence of shifting geopolitics and will have longer-term implications for the European economy, the rise in energy prices is already very real. In Germany, if gasoline prices remained at their current levels until the end of the year, the loss in purchasing power for consumers would already be larger than in 2022.

Today’s inflation data shows that a first inflation wave is clearly on its way. While currently available regional data suggests that the inflation surge in March was mainly driven by energy prices, knock-on effects on transportation costs, food prices and other industrial products will follow. The only question is whether this will be a single, time-limited wave or whether it will eventually also lead to a de-anchoring of inflation expectations and higher wages. However, even if it is only ‘one’ large inflation wave, German inflation should increase further, remaining in the 3% to 4% range for most of the year.

In the UK, petrol prices have gone up further as the Middle East conflict escalates, with Iran-backed Houthi rebels in Yemen launching strikes on Israel for the first time since Israel and the US jointly attacked Iran on 28 February.

Average petrol prices have now reached 152p a litre – the highest in 28 months – while diesel has topped the 180p mark to hit 181.2p, a price not seen since December 2022, according to the RAC motoring group.

RAC head of policy Simon Williams said:

Compared to the start of the Iran conflict, it costs £10.55 more to fill up a typical family car that runs on petrol, and £21.35 more for a comparative diesel car.

The financial strain on the eight-in-10 motorists that tell us they depend on their cars continues to build, and at a particularly rapid rate for those who drive diesel vehicles.

We encourage drivers to continue to fill up as normal and use free apps such as myRAC to pay the lowest price possible each time they fill up.

In Germany, inflation picked up sharply in March on the back of a surge in energy prices caused by the US-Israeli war on Iran.

Inflation, on the EU harmonised measure, jumped to an annual rate of 2.8% in Europe’s largest economy, from 2% in February, according to data from the federal statistics office.

Energy prices rose for the first time since December 2023, jumping 7.2% compared with the same month last year. Food prices edged up by 0.9% year on year.

Core inflation, which strips out volatile food and energy prices, remained at 2.5%.

Wise is rolling out everyday bank accounts in the UK, in an attempt to grab market share from traditional highstreet banks and fintechs.

The London-based money transfer company said it is launching a current account that will hold money and pay out a 3.26% variable interest rate on balances. Customers will also be able to set up direct debits for recurring payments such as bill payments.

The fintech firm, known for its cheap foreign exchange transfers, is expanding its digital banking services in an increasingly competitive market. Wise served 3 million individuals and businesses last year who collectively hold £8bn in their accounts. Globally, the company has more than 15.6 million active customers with a total of £27.5bn in their Wise Accounts.

Rival Monzo has 15 million personal and business customers, while Revolut has 13 million in the UK, where it recently received its UK banking licence.

Revolut has started rolling out current accounts to a small number of new UK customers and wants to gradually expand this.

Nilan Peiris, chief product officer at Wise, said:

Banks haven’t kept pace with what customers expect for their current account. People shouldn’t need separate accounts for home and abroad.

With the Wise current account, we’re giving customers a smarter way to manage their daily financial needs. They can hold and fully access their money while getting a return, easily spend on everyday purchases and split bills, and send and receive money quickly across borders – all at a low cost with no hidden fees.

The London-listed shares rose slightly on the news.

Britain has imposed a £390,000 penalty on Apple’s Irish subsidiary for breaching its sanctions on Russia.

A notice from the UK government said Ireland-based Apple Distribution International, a subsidiary of the US tech giant, had made funds available to a designated person without a licence in relation to two payments in 2022.

Apple said it adheres to the laws in countries where it operates, and takes compliance with sanctions “extremely seriously”. It said in a statement:

After identifying two payments to a developer that days earlier had become affiliated with a sanctioned entity, we promptly and proactively reported our finding to the UK government.

We are constantly working to enhance our already robust compliance protocols, which are consistent with industry standards.

Aluminium prices have surged to four-year highs after Iranian airstrikes on two major Middle East producers over the weekend raised fears of a supply shock.

Benchmark aluminium on the London Metal Exchange rose nearly 5% to $3,453 a tonne, and touched $3,492 earlier today. This compares with an all-time high of $4,073.50 a tonne in March 2022, after the invasion of Ukraine by Russia, a top producer of the metal.

Aluminium is widely used in transport, packaging and construction. The US-Israeli war on Iran and resulting closure of the Strait of Hormuz have already restricted shipments of aluminium to the United States, Europe and elsewhere.

Aluminium Bahrain, which runs the world’s largest single-site smelter, said it was assessing the damage from the Iranian strikes.

Abu Dhabi-based Emirates Global Aluminium, owned by two sovereign wealth funds of the United Arab Emirates, said its site sustained “significant damage”.

Analysts at Britannia Global Markets said:

Iran’s strikes on Middle Eastern aluminium plants are threatening to send a fragile market into crisis, raising the prospect of record prices.

The conflict’s impact is being amplified because constraints on production elsewhere have eroded global inventories, leaving the market with little buffer against shocks.

The four-day bank holiday weekend is expected to be the busiest Easter on the roads in four years, despite a surge in fuel prices caused by the conflict in the Middle East.

Drivers are planning nearly 21m leisure journeys between Thursday and Easter Monday, according to a study by the RAC and the traffic analytics specialists Inrix.

With more than 1m additional trips planned compared with last year, this Easter is set to be the busiest on the roads since 2022, which was the first full getaway after the Covid lockdowns ended. And signs that the weather could warm up in time for the weekend mean the number of ad hoc journeys could rise, the RAC said.

The AA predicted that traffic during the Easter period would peak on Thursday, when many schools break up. Just over half of people expect to travel short distances of under 50 miles. About one in five plan to visit friends and family, one in 10 want to head outdoors for walking or cycling, and 5% expect to visit DIY stores or garden centres.

Lee Morley, an AA expert patrol, said:

After what feels like a very long, wet winter, lots of families are looking forward to the Easter break.

People appear undaunted by the average petrol price rising above 150p a litre last Friday, when the Asda boss warned of some temporary shortages.

Filling up a 55-litre family car with diesel this Easter will cost at least £19 more than it did on Good Friday last year, while a tank of petrol will be almost £8 more, with further increases likely, according to the RAC.

The Iran war has led to a surge in pessimism in the UK as half of households are already struggling to afford everyday essentials.

The escalating conflict in the Middle East, which has driven the price of oil, gas, crop fertiliser and other raw materials sharply higher, threatens to cause another cost of living shock.

The latest Which? consumer insight tracker found that price pressures were forcing half of households, an estimated 14 million, to make at least one adjustment – dip into savings, sell possessions or borrow money – to cover the cost of essentials on a daily basis.

Confidence in the future of the UK economy plummeted by 13 points to a score of -56 in the month to 13 March, the lowest level recorded since the end of 2022, the tracker found.

British lenders in February approved the most mortgages in three months while consumer credit grew at the fastest rate in almost two years, according to Bank of England data.

Net mortgage approvals for house purchases rose to 62,600 in February from 60,200 in January. It was the highest figure since November, but below the average of 63,500 over the previous six months.

Individuals borrowed a total of £4.8bn through mortgages, up from £4.2bn in January, and above the previous six-month average of £4.5bn.

Going forward, the expectation of higher borrowing costs could dampen demand. With inflation likely to head higher again because of soaring oil and gas prices, the Bank of England is now expected to raise interest rates at least twice this year.

The data also showed that people borrowed £1.9bn in February, up from £1.8bn the month before, in unsecured credit. This included credit card borrowing of £800m, down from £900m in January, while other forms of credit such as car dealership finance and personal loans increased to £1.2bn from £900m.

Eli Lilly has put pressure on Britain to agree regular increases in NHS drug prices, in return for the US pharmaceutical company resuming investment in the UK.

Patrik Jonsson, president of Lilly’s international businesses, told the Financial Times the company was in talks with UK ministers and was feeling “optimistic” about hammering out an agreement by the summer, under which Britain would pay more for its medicines.

The talks will also explore “innovative” pricing plans linking payments for anti-obesity medication to whether patients become well enough to return to work as a result of their treatment, he said.

Lilly makes the bestselling weekly jabs Mounjaro and Zepbound for diabetes and weight loss respectively, and is gearing up for the launch of an anti-obesity pill.

Last September, Lilly said its planned London Gateway Lab, part of a £279m investment, was on hold, “as we are awaiting more clarity around the UK life sciences environment”.

The move came in the same week when US company Merck (also known as MSD) ditched its under-construction £1bn research centre in London and Britain’s biggest pharma firm AstraZeneca put a £200m investment in Cambridge on hold. Just before, talks between the industry and government about a rebate scheme collapsed.

Jonsson said to resume its investment, Lilly wants to see more action from the UK government – beyond the UK-US pricing deal announced in December.

What we would need to see is actually those goals turning into really a well-defined action plan with interventions and timelines.

Under pressure from Donald Trump who has complained about high drug prices in the US and lower prices elsewhere, Keir Starmer in December agreed to the first increase in NHS cost-effectiveness thresholds in 27 years, in return for the US dropping threatened tariffs on UK drugmakers.

This raised the price the health service will pay for drugs that give a patient a year of good-quality life from £20,000-£30,000 to £25,000-£35,000.

Ministers from the Department of Health will this week overrule civil service concerns about value for money and push ahead with the increase. An announcement is expected on Tuesday, although the US could still make changes to the agreement.

The government has agreed as part of the deal to double the UK’s spending on all drugs by 2035 from 0.3% to 0.6% of GDP.

Lilly wants the government to phase out its multibillion-pound rebate scheme, under which companies pay back a chunk of their revenues to the NHS. Jonsson said that prices for medicines in the UK had been

far too low for far too long, and even with the current threshold, we are not back to where we started more than 20 years ago. The threshold can’t be written in stone for another three decades.

Brent crude is on course for a record monthly rise of nearly 60%, exceeding gains it made during the 1990 Gulf War.

The global oil benchmark is currently trading 3.5% higher at $116.051 a barrel – up 59% so far in March – while New York light crude rose 2% to $101.6 a barrel.

Yemen’s Houthi rebels, which are backed by Iran, launched their first attacks on Israel since the start of the US-Israel war with Iran over the weekend. More US troops have arrived in the Middle East while the Israeli military said today that is it attacking government infrastructure “throughout Tehran”.

Vandana Hari, founder of oil market analysts Vanda Insights, said:

The market has all but discounted the prospect of a negotiated end to the war, Trump’s claims of ongoing ‘direct and indirect’ talks with Iran notwithstanding, and is bracing for a sharp escalation in military hostilities, which is a bullish signal for crude, with huge uncertainties on the timing and nature of the outcome.

Natural gas prices have also gone up again, amid concerns that supplies will be further disrupted. Dutch month-ahead futures rose 1.6% to just over €55 a megawatt-hour.

British fashion retailer Debenhams has raised its 2027 profit forecast after beating forecasts for last year, as its turnaround strategy is paying off.

The shares rose more than 6% on the news. The well-known brand made a comeback last March after the online retailer Boohoo rebranded as Debenhams. It embarked on measures to cut costs and debt amid fierce competition from low-cost fast fashion rivals such as Shein and the resale app Vinted.

Debenhams, which owns brands including PrettyLittleThing, Oasis, Warehouse and Karen Millen, forecast annual adjusted core profit of £53m for the year to 28 February, ahead of its previous guidance, driven by a 76% jump in second-half profit. It expects 2027 profits to grow in double digits.

Dan Finley, the chief executive, said:

Our multi-year turnaround strategy continues at pace. Our pivot to the stock-lite, capital-lite, highly profitable marketplace is working.

The cost base has been reset, the warehouse consolidation completed, the tech re-platform delivered, the stock base rightsized, most of the onerous costs exited and the brand management teams strengthened. This is significant progress, ahead of our plan, but there is still more to be delivered and we now focus on growth.

The company said all its brands are trading profitably, on an adjusted core profit basis. It raised £40m from shareholders in February, more than its initial target of £35m, backed by the Boohoo founder, Mahmud Kamani. It came less than 18 months after the group raised £39m from shareholders as it battled to revive sales.

The retailer has been locked in a drawn-out tussle with its top investor Frassers Group, majority-owned by retail tycoon Mike Ashley, which unsuccessfully tried to block the rebranding and out Kamani from the board.

Wayne Brown, analyst at Panmure Liberum, said:

This is the third upgrade this year and FY26 EBITDA has now been upgraded 51% since the same time last year.

Net debt is not overly stretching and is predicted to fall organically before we even see the sale of non-core assets.

The transformation work done has been huge and the noise (and costs) associated with these is now all but over.

Some may say it is too early to call, but all the signals and green shoots of the new business model are now visible and when investors start to recognise this, the shares will rally very hard.

Government bonds around the world are set for the biggest monthly losses in more than a year, as investors worry about the impact of a prolonged war in the Middle East on inflation and economic growth.

Declines in bond prices have pushed their yields (or interest rates) higher, although they eased on Monday.

The two-year US Treasury yield is set for a monthly rise of around 50 basis points, the biggest increase since October 2024. Australia’s three-year yield is also 50bps ahead in March, the most in 17 months. Japan’s two-year government bond yield has risen 12.5bps this month.

Moh Siong Sim, a strategist at the Singapore bank OCBC, told Reuters:

Now that the reality is sort of sinking in that perhaps the oil price might stay high for a bit longer, given that it’s hard to see an end to the war anytime soon, the growth impact is starting to become more of a focus.

The buzzword here is stagflation. Initial focus was on inflation. Now the ‘stag’ bit is moving into the picture, and that’s perhaps explained why short-ended bond yields have come off.

Oil prices have surged above $100 a barrel since the US and Israel began attacking Iran on 28 February. This has raised fears of higher inflation, and led to a dramatic shift in interest rate expectations. The Bank of England is now expected to raise interest rates, rather than cutting them, at least twice this year, as is the European Central Bank.

The US Federal Reserve, which has been under pressure from Donald Trump to cut rates, is forecast to leave them on hold.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Asian stock markets have fallen while oil prices have climbed further, after Donald Trump said he wants to “take the oil” in Iran.

Brent crude, the global oil benchmark, has risen a further 2.2% to $115.01 a barrel, up $2.4.

Asian stock markets have declined, with the exception of the Shanghai and Singapore exchanges, which have edged slightly higher. Japan’s Nikkei tumbled 3% and Hong Kong’s Hang Seng lost 1.1%.

Donald Trump has said his “preference would be to take the oil” in Iran and that US forces could seize the regime’s export hub on Kharg Island, the Financial Times is reporting, as the US sends thousands of troops to the Middle East.

The US president compares the potential move to Venezuela, where the US intends to control the oil industry “indefinitely” following its ousting of president Nicolás Maduro in January.

Trump said in the interview with the FT on Sunday:

To be honest with you, my favourite thing is to take the oil in Iran, but some stupid people back in the US say: ‘why are you doing that?’ But they’re stupid people.

You can follow the latest news on the Middle East here:

Keir Starmer will convene executives from the energy industry, shipping, banking and insurance at No 10 Downing Street today to discuss emergency measures to contain the continuing crisis from Iran’s blockade of the strait of Hormuz.

The roundtable includes leaders from Shell, BP, British Gas parent Centrica and Norway’s Equinor, as well as the insurance giant Lloyd’s of London (the centre of global shipping insurance), banking groups HSBC and Goldman Sachs, and container shipping companies, Denmark’s Maersk and France’s CMA CGM.

No 10 said it is intended to be a constructive meeting about the perilous state of the strait of Hormuz, a key shipping route through which about a fifth of global oil and gas supplies pass, our deputy political editor Jessica Elgot reported. It is likely to inform short and long-term contingency planning amid threats from Iran that it intends to assert sovereignty over the strait, including potentially charging vessels for access once the chokepoint is eventually reopened.

Separately, Rachel Reeves, the UK chancellor, will warn G7 nations they must move faster on clean energy to insulate economies against global price shocks from oil and gas as she and the energy secretary Ed Miliband meet G7 finance and energy ministers today.

The Agenda

• 9.30am BST: Bank of England mortgage lending and consumer credit

• 10am BST: Eurozone economic sentiment and consumer confidence

• 1pm BST: Germany inflation for March (preliminary estimate)