Brent crude prices hit highest level since August
Geopolitical jitters have pushed Brent crude prices to their highest level in six months.
It follows a strong session for crude, with both Brent and WTI prices having risen by more than 4% on Wednesday, finally pushing Brent back above $70 per barrel.
Jason Tuvey, deputy chief emerging markets economist at Capital Economics said there will be wider implications for inflation and interest rates if there were to be any political changes in Iran as a result of any military action by the US:
Fresh strikes by the US on Iran would, coming in the wake of recent protests in the country, raise the chances of some form of regime change which could eventually pave the way for Iran’s possible reintegration into the global economy.
More immediately, strikes on Iran would risk causing oil prices to jump and threaten to boost inflation in much of the world, reducing the pace or number of interest rate cuts by major central banks.
Full story: The US military is ready for possible strikes on Iran as soon as this weekend, multiple news outlets reported Wednesday citing unnamed sources.
However, the reports said, Donald Trump has yet to make a final decision on whether to carry out an attack. Trump has repeatedly demanded Iran cease its nuclear program, and has warned he intends to use force if no deal is reached.
According to the New York Times, CBS News and CNN, the US military has assembled sufficient air and naval resources in the Middle East to launch an attack in the coming days.
Reuters, citing an unnamed senior US official, offered a slightly different timeline, reporting that top US national security advisers were told during a meeting in the White House Situation Room on Wednesday that all US military forces deployed to the region should be in place by mid-March.
CBS also noted the timeline for a strike was likely to extend beyond this weekend.
Iran is expected to submit a written proposal on how to resolve its standoff with the United States in the wake of talks with the US in Geneva on Tuesday, the official told Reuters.
During a Wednesday press conference, White House press secretary Karoline Leavitt did not answer a question about an exact deadline Trump would give Iran to achieve a deal before engaging in military action.
“Iran would be very wise to make a deal with President Trump,” she said, adding that the Trump administration “totally obliterated Iran’s nuclear facilities”, but that “diplomacy” was always the president’s “first option”.
Read more:
Updated
Oil prices edge higher as US-Iran tensions simmer
Oil prices are on the rise as traders react to growing concerns that the US could launch military action against Iran.
Both the US and Iran embark on military posturing despite trying to de-escalate a standoff over Tehran’s nuclear programme.
Brent crude is up 1.55% at $71.44 a barrel
WTI is up 1.61% to trade at $66.24 a barrel
Some analysts are now speculating that while the White House is unlikely to push for a regime change – which could result in a months-long military campaign – Trump could order bombs to drop.
Joachim Klement, a research analyst at Panmure Liberum, said there was a lack of political will to embark on a change in Iranian leadership, given Trump’s criticism of failed US interventions in Afghanistan and Iraq.
Thus, the most likely outcome seems to be another bombing campaign similar to what we saw in 2025 with the goal to further damage Iran’s nuclear capabilities, its military infrastructure or maybe even extract the Ayatollah from the country.
As we have seen in the case of Venezuela, extracting the leader of a country may not mean regime change in the case of this US administration.
In this base case of a short military intervention without troops on the ground or an outright invasion, we think Iran will not block the Straits of Hormuz, though oil prices will reflect a heightened risk premium for some time to come.
Updated
Aarin Chiekrie, an equity analyst, Hargreaves Lansdown notes that there is a bit more disappointment ahead as Centrica’s trading arm is likely to continue to lag throughout the year.
On the face of it, British Gas owner Centrica’s headline numbers were a tough read as energy markets adjusted to more normalised conditions.
Lower commodity prices and lower energy price volatility weighed on performance, causing total profits to fall sharply.
This was particularly apparent in the group’s trading arm, Centrica Energy, which buys and stores gas when prices are low, then waits for higher prices to generate and sell power back to the market, profiting on the difference. But the division fell well short of prior guidance, and performance is likely to remain subdued through 2026.
Performance in Centrica’s retail arm, which includes British Gas, was a bit better as the group saw customer numbers and satisfaction scores continue to trend in the right direction. But warmer-than-normal weather contributed to underlying operating profits in the division slipping 7% to £424m
Chiekrie added that investment in renewables may also take some time to bear fruit:
Centrica’s also investing heavily to build out its renewable energy infrastructure and extend the life of its nuclear assets.
Results aren’t going to come cheap or quickly, though, with between £600m-800m per year set to be invested in the transition out to 2028, which could put a strain on cash flows if returns aren’t as high or quick as planned.
Full story: British Gas owner pauses share buyback as profits plummet
The owner of British Gas has paused its plan to buy back shares from shareholders after the company’s full-year profits slumped by almost 39%.
Centrica reported adjusted earnings of £1.42bn for 2025, down from £2.3bn the year before, after a “challenging” year for the business as it undertakes a series of multibillion-pound investments.
British Gas reported lower profits for the year despite modest growth in its customer base after milder weather meant households used less gas and electricity. The supplier’s adjusted profits fell to £309m for the year, from £364m the year before, even as the number of household customers grew by 1% to almost 8 million accounts.
The company’s profits for energy trading were also hit by geopolitical volatility, while outages in the UK’s nuclear reactor fleet also eroded earnings for the year.
Read more here:
That sell-off in Centrica shares has made the company the worst performer on the FTSE 100, and by a longshot.
The next biggest faller is Rio Tinto, which is down 3.7%, after net profit fell 14% to $10bn for 2025, due to higher depreciation, taxes and financing costs.
Centrica shares tumble 9.5% after profts plunge, buyback paused
Shareholders are not taking news of the profit plunge and share buyback pause lightly, sending shares in Centrica down as much as 9.5% to 177.2 per share.
And we’re off!
European markets are open for trading and most major indexes are in the red:
FTSE 100 is down 0.3%
Germany’s DAX is down 0.33%
France’s CAC 40 is down 0.2%
Spain’s IBEX is down 0.16%
Introduction: British Gas owner pauses buyback as profits plunge 39%
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Tough news for British Gas owner Centrica this morning, which announced it is putting share buyback plans ice after suffering a 39% drop in profits for full-year 2025.
Centrica said adjusted earnings before interest, tax, depreciation and amortisation fell to £1.4bn for the year, down from £2.3bn a year earlier. However, that was ahead of average analyst forecasts for £1.3bn.
Centrica CEO Chris O’Shea conceded it had been a “challenging” year for the business:
2025 has been a year of real momentum and we have made bold investments as we continue the fundamental transformation of Centrica.
The environment has been challenging, and performance has varied across the business.
However, we have remained disciplined, delivering strong operational performance and achieving customer growth across all our Retail businesses simultaneously for the first time in over a decade.
He tried to assure investors that putting the share buyback programme on pause would be better for shareholders in the long-run:
With major projects like Sizewell C, Grain LNG and our Meter Asset Provider laying the groundwork for more stable and predictable earnings, our long-term opportunities have never been better.
Pausing the buyback enables us to prioritise investment that creates lasting value for shareholders, while continuing to deliver the reliable, affordable energy that households and businesses need to power economic growth through the transition.
Meanwhile, ongoing concerns over AI’s impact on the job market has pushed younger generations to blue collar-work, according to new data from Employment Hero.
PA is reporting on the figures, which show younger workers are driving jobs growth within the construction and trade industry, amid rising youth unemployment and the looming threat of AI.
The HR platform’s report also showed that hiring of Gen Z workers significantly outpaced other generations last month.
Employment for the age group - incorporating those born between 1997 and 2012 - increased by 16.8% in January, compared with the same month last year.
The Agenda
11am GMT: CBI Industrial Trends Orders
1.30pm GMT: US International Trade in Goods and Services, December and Annual 2025
Updated
