The Chancellor has warned MPs that the ongoing conflict in the Middle East could significantly impact the UK economy. Rachel Reeves pointed to rising oil prices, now above $90 a barrel, and increasing gas costs, which threaten inflation and interest rates. “The quicker we can de-escalate, the better it will be for all of those economic variables,” she told MPs. Meanwhile, Sir Keir Starmer has said plans to raise fuel duty in September will be kept under review in light of what’s happening in Iran. Finally, members of the International Energy Agency have agreed to release 400m barrels of oil from their emergency reserves in an attempt to tamp price rises. The announcement sent the price of Brent crude up 5% to $92.30 a barrel.

The UK economy is projected to have grown by 0.2% in January, according to a Bloomberg poll. Deutsche Bank’s Sanjay Raja noted this growth reflects a “strong footing” driven by increased retail spending and improvements in administrative services. Analysts from Pantheon Macroeconomics suggest the labour market is stabilising, with hiring confidence at a five-year high. Despite some optimism, the economic outlook remains uncertain, especially with rising oil prices and geopolitical tensions affecting forecasts.

British companies are increasingly reluctant to hire young workers due to rising costs, including minimum wage and national insurance increases. Business leaders warn that the Employment Rights Act may further discourage hiring less experienced individuals. The British Chambers of Commerce (BCC) predicts a rise in unemployment to 5.5%, disproportionately affecting young people. Kate Shoesmith, BCC’s director of policy, commented: “Businesses are trying their level best to stay afloat right now.” Meanwhile, a survey by the Federation of Small Businesses revealed that 26% of firms are employing fewer workers than before, the worst rate in over a decade.

Estate agents warn the war in Iran is undermining a fragile recovery in the UK housing market. After early signs of renewed buyer activity at the start of the year, property transactions have slowed as geopolitical uncertainty and rising oil prices push up mortgage expectations. Data from Royal Institution of Chartered Surveyors (RICS) shows new buyer enquiries fell 26% in February, reflecting weakening confidence. Economists warn the uncertainty may delay housing activity in the short term. In a worst-case scenario, forecasts from Capital Economics suggest house prices could fall by up to 15% if borrowing costs rise significantly.

The House of Lords has been alerted to the risks of the UK falling behind the US and EU in stablecoin regulation. A petition by Stand With Crypto UK garnered over 85,000 signatures, prompting an inquiry into the Government’s approach. Adriana Ennab, Director of Stand With Crypto UK, said: “The establishment is paying attention. The question is whether it moves fast enough.” The inquiry revealed that the UK has only four firms in the FCA’s stablecoin sandbox, while the US has over 200 projects.

Aviva’s Direct Line business has been fined £10.6m by the Bank of England’s Prudential Regulation Authority (PRA) for miscalculating the balance sheet strength of its underwriting subsidiary, UK Insurance Limited (UKI), over two years. The PRA identified “ineffective preventative and detective controls” as the cause of the errors, which went undetected for a significant period. The fine was reduced from £21.3m due to Direct Line’s early admission of the mistake.

HM Revenue & Customs (HMRC) has warned that up to 1m taxpayers may be missing out on unclaimed tax refunds averaging £453 each. Many individuals have not checked their accounts, risking significant financial loss. Common reasons for overpayments include incorrect tax codes and job changes. HMRC stressed that refunds are not automatic; claimants must check their personal tax accounts on GOV.UK or the HMRC app.

Lloyd’s of London has faced criticism for cancelling policies and increasing insurance rates amid heightened risks in the Gulf region. The insurer maintains it continues to offer coverage for hull and cargo in the Persian Gulf, the Gulf of Oman, and the strait of Hormuz, albeit at higher premiums. Insurance rates for war damage have surged to between 1% and 1.5% of a vessel’s insured value, up from 0.25%. Lloyd’s chair Sir Charles Roxburgh affirmed the market’s commitment to supporting international trade despite the challenges.

A report from the Public Accounts Committee (PAC) has criticised the UK Government’s inability to set effective targets for reducing reliance on external consultancy services. Despite plans to cut consultancy spending by £1.2bn by 2026, the report highlights a lack of accurate data on current spending, estimated between £1.36bn and £2.23bn. Andrew Forzani, the government chief commercial officer, noted that some departments are not adhering to guidance on consultancy requirements. Clive Betts MP said: “Actually bearing down on this spending will be a tough knot to unpick.” The PAC calls for better oversight and compliance measures.

Blackstone is preparing a potential £250m sale of its Cargo office building at 25 North Colonnade, signalling renewed investor confidence in Canary Wharf after several years of weak demand for large office assets.