Time to wrap up. Here are today’s main stories:

• The head of the IMF has warned that the world economy is being tested by a “large shock” from the Middle East conflict, that will hurt all countries (with poorest suffering the most).
  

• Kristalina Georgieva also warned governments against overly generous schemes to help citizens handle the higher cost of energy.
  

• UK GDP expanded by a stronger than expected 0.5% in February, official figures show, suggesting the economy was gaining momentum before the onset of war in the Middle East dashed hopes of recovery.
  

• Europe has only six weeks of jet fuel left before shortages will hit because of the Iran war, according to the head of a global energy watchdog.

  Fatih Birol, the executive director of the International Energy Agency, said there would be flight cancellations “soon” if oil supplies from the Middle East were not restored within the coming weeks.
  

• The budget airline easyJet has warned the impact of the Iran war on bookings and oil prices will hit its profits, having driven up fuel costs by £25m in the last month alone.
  

• Rachel Reeves has announced an expansion of support for the most energy-intensive UK businesses, as they face soaring bills as a result of the Middle East conflict.

Our main Middle East blog has all the latest on the Iran war:

IMF chief Kristalina Georgieva goes on to warn policymakers not to make the oil and gas crisis worse by implementing measure to increase demand for energy.

She tells delegates at the IMF’s spring meeting in Washington DC that “everyone” will experience some pain from the current disruption.

Because of this equilibrium: Less supply, same demand, [means] prices go up. So brace for this pain. But please don’t make it worse.

Georgieva explains it would be a mistake to provide support “generously”, saying:

Don’t put in place policies that would increase demand rather than shrink it, out of good intentions to help the vulnerable people.

That’s a warning against subsidising energy to cushion the impact of higher prices.

[Economists argue that with so much oil and gas vanishing from the market, prices will rise to levels where some countries cannot afford it, creating ‘demand destruction’].

Over in Washington DC, the International Monetary Fund is holding a debate on the global economy.

IMF chief Kristalina Georgieva says the world economy is facing another, large, shock:

The world economy has been, very resilient over the last few years, facing shock after the shock. And this resilience is tested yet again, this time by a shock that is large.

Twenty percent of oil and gas is stuck in the Strait of Hormuz, depriving primarily Asia, but also Europe, and other parts of the world of a vital resource. It is global. Everybody feels the impact.

Georgieva says the conflict is “very hard” on energy exporters, both on their people and their economy.

But if you are an oil importer, “you feel the pain more”, she says.

The countries most vulnerable to this shock are low income countries, Georgieva continues, saying those in the Pacific Islands may wonder “would a tanker ever come all the way to me at the end of this supply chain?”

She adds:

We now have a ceasefire. We pray for the ceasefire to turn into a durable peace. But that is not done yet.

Dutch airline KLM is to cancel 160 flights in Europe in the coming month due to rising fuel costs.

The Dutch arm of airline group Air France KLM said the cancellations affected less than 1% of its total European flights. KLM also said it was not experiencing a shortage of jet fuel (via Reuters).

The oil price has pushed higher, after some combative comments from US defense secretary Pete Hegseth.

Hegseth said Iran could settle the conflict “the nice way,” through a deal “or we can do it the hard way.” He also pledged to maintain the blockade on Iranian ports.

My colleague Joseph Gedeon reports:

Iran’s energy infrastructure is “not destroyed yet” and the US is “locked and loaded” to finish the job, Pete Hegseth, the defense secretary, said on Thursday as he called many of the press corps gathered the moral equivalent of the Pharisees who conspired to destroy Jesus Christ.

Hegseth’s comments from the Pentagon podium came as a naval blockade of Iranian ports began this week and he called on Tehran to accept a nuclear deal or face consequences for its remaining infrastructure, power generation and energy industry.

“We are reloading with more power than ever before, and better intelligence, even more importantly, better intelligence than ever before,” he said.

“You are digging out your remaining launchers and missiles with no ability to replace them. You can dig out for now. Can’t reconstitute, but we can,” he also said about Iran’s military leadership.

Brent crude is now up more than 3%, at $98 a barrel.

FTSE 100 testing and inspections company Intertek has rejected a £7.9bn takeover bid by a Swedish private equity firm - after it was revealed on an obscure Argentine website.

Intertek on Thursday said that it rejected the £51.50 per share bid from EQT, saying it undervalued the company.

EQT was forced to announce its bid after the approach was reported on an obscure website purporting to be a radio station from a small city in Argentina to the south of Buenos Aires. The site mixes anonymous articles on business topics in both English and Spanish. The scoop was revealed in a brief, unsigned article which made no reference to its sources.

Website analysis tools linked the site to locations in Sofia, the capital of Bulgaria.

Whatever the source of the leak, EQT said on Thursday that it was “considering its options” after its cash offer was rejected. EQT has until 14 May to make a firm offer or to walk away.

EQT, which has offices in several European cities, including London, had approached Intertek on Friday. The bid was rejected on Monday and Intertek on Tuesday then announced a strategic review of the business to look at selling or demerging its energy and infrastructure business.

In a statement on Thursday afternoon, Intertek said:

“The board of Intertek carefully reviewed EQT’s proposal with its advisers and unanimously concluded that it fundamentally undervalues Intertek and its future prospects. Accordingly, the Intertek Board unanimously and unequivocally rejected the proposal on 13 April 2026.”

Shares in Intertek are up 10% today, having also jumped 12% on Tuesday.

Royal Mail has reached a deal with the postal workers’ union over pay and plans to reduce the number of days second class letters are delivered across the UK.

Royal Mail, which is routinely fined millions of pounds a year by the postal regulator for missing mandated delivery targets, said that the deal paves the way for improving its quality of service.

The company, which was acquired by Czech billionaire Daniel Křetínský for £3.6bn last year, was given permission by Ofcom to loosen its universal service obligations (USO) last July.

Royal Mail has been piloting the reforms, which include ending second-class post on Saturdays and reduce the service to alternating weekdays from Monday to Friday, in 35 offices.

However, the deal with the Communications Workers Union (CWU) will see the new reforms extended to another 240 delivery offices as part of a wider trial.

The aim is to complete the rollout across Royal Mail’s full 1,200 UK network by the end of the year.

Royal Mail had lobbied for years for the changes in line with dramatically declining letter volumes, from a peak of 20bn annually in 2004/5 to 6.3bn in 2024/25.

The deal also includes a pay rise and better terms for workers who joined Royal Mail on, or after, 1 December 2022.

“This agreement with the CWU paves the way for universal service reform rollout and represents a significant investment in our people,” said Alistair Cochrane, chief executive of Royal Mail, adding:

“Moving ahead with reform will make a real difference to Royal Mail’s quality of service, supporting the delivery of reliable, efficient and financially sustainable postal service for our customers across the UK.”

Last month, Royal Mail was criticised for announcing another hike in the cost of first- and second-class stamps while providing what Citizens Advice described as a “failing service”.

From 7 April, the price of a first-class stamp rose to £1.80, while the cost of the second-class service increased to 91p.

Royal Mail blamed the need for price increases on the “continued rise in the cost of delivery for every letter”.

In October, Royal Mail was fined £21m for missing its annual delivery targets for first- and second-class mail, leading to millions of letters arriving late across the UK, according to the regulator Ofcom.

American industrial output dropped last month – an early sign that higher energy price are hurting Donald Trump’s domestic economy.

Production at US factories, mines and utility companies fell by 0.5% in March, data from the Federal Reserve shows, including a 0.1% drop in manufacturing output.

Capital Economics told clients:

The 0.1% m/m fall in manufacturing output was a touch weaker than the 0.1% gain that we and the consensus expected.

While growth in February was admittedly revised up to 0.4%, from 0.2%, that only offset a similar-sized downward revision to growth in January.

Most of the weakness in March stemmed from a 3.7% m/m fall in motor vehicles & parts manufacturing, continuing its volatile run.

A mega-refinery owned by Africa’s richest person is becoming an increasingly important source of vital jet fuel supplies to Europe, helping fill a gap left by the impact of the Iran war while boosting profitability, Bloomberg are reporting.

Here’s the details:

Aliko Dangote’s $20 billion plant in Nigeria reached full capacity just a couple of weeks before the conflict in the Middle East created a historic oil-supply disruption. Benefiting from local crude purchases that save cost, the upheaval in the market has given the billionaire a greater advantage amid deepening concerns about fuel shortages.

The 650,000 barrel-a-day facility, one of the world’s biggest, has raised its jet fuel shipments to Europe to unprecedented levels with prices in the continent recently hitting the highest on record. It marks a major turnaround for Nigeria that for years bought fuel from Europe, and leaves Dangote with room to raise supplies further just as European refineries face the prospect of cutbacks because of expensive crude and a lack of Middle Eastern supply.

“Given that Europe is particularly reliant on jet barrels via the Strait of Hormuz, we could expect to see a larger portion of Dangote’s jet exports heading towards Europe,” said Qilin Tam, head of refining at FGE NexantECA, who estimates the plant can make as much as 150,000 barrels a day of the fuel at full tilt.

Over in Washington DC, the IMF is warning that Africa’s economic growth has been hit by the Iran war.

Abebe Aemro Selassie, director of the IMF’s African Department, is telling reporters:

Sub-Saharan Africa entered 2026 with the strongest economic momentum it had seen in a decade. And then came the war.

The good news is that in 2025, economic activity accelerated across nearly all country groups, with regional growth reaching 4.5%, the fastest pace in over a decade.

Selassie points to countries such as Ethiopia and Nigeria, who he says reaped the benefits of “macroeconomic reforms, exchange rate realignments, subsidy reductions, and strengthened monetary policy frameworks.”

But now, the Fund has cut its growth forecast for 2026 to 4.3%,down from 4.6%.

Selassie says:

The war in the Middle East is a major new external shock. Oil, gas, and fertilizer prices have surged. Shipping costs have risen. Trade with Gulf partners has been disrupted. Tourism and remittances are being squeezed. Financial conditions have tightened, particularly for fuel-importing countries.

The US jobs market appear to be holding up well in the face of the energy shock from the Middle East.

The number of Americans filing new claims for unemployment benefit has fallen by 11,000 to 207,000 last week.

The head of the International Energy Agency has warned that Europe has about six weeks of jet fuel left.

In an interview with Associated Press published today, IEA executive director Fatih Birol warned that flight cancellations could begin “soon” if oil supplies remain blocked by the Iran war.

Birol said Europe has “maybe 6 weeks or so (of) jet fuel left,” after the effective closure of the strait of Hormuz led to “the largest energy crisis we have ever faced.”

He told AP that the impact will be “higher petrol (gasoline) prices, higher gas prices, high electricity prices,” adding that some parts of the world will be hit worse than others.

“The front line is the Asian countries” that rely on energy from the Middle East, he said, naming Japan, Korea, India, China, Pakistan and Bangladesh, adding:

“Then it will come to Europe and the Americas.”

And if the strait of Hormuz isn’t reopened, Birol said that for Europe:

“I can tell you soon we will hear the news that some of the flights from city A to city B might be canceled as a result of lack of jet fuel.”

The US is currently blockading Iranian ports, whiel Tehran has laid mines in the vital waterway to restrict traffic through the strait.

Yesterday, IMF chief Kristalina Georgieva warned that the disruption from the Middle East conflict would continue even after the war stops, explaining:

“We need to recognise disruptions are not going to evaporate overnight even if the war ends tomorrow. Why? Because a tanker is a slow-moving vessel. It would take 40 days to get all the way to Fiji.”

Ouch! Aluminium prices have hit a four-year high today, adding to the inflationary pressures on companies.

Benchmark three-month aluminium on the London Metal Exchange rose as high as $3,672 a metric ton this morning, its highest level since March 24, 2022.

Reuters reports that the global aluminium market is facing a supply deficit this year due to the Iran war.

One Gulf producer warned earlier this month that fully restoring production at one of its UAE smelters hit by an Iranian attack in late March could take up to a year.

The Middle East accounts for about 9% of global production of aluminium, and Chinese aluminium exports are expected to rise as buyers look for other sources of the metal.

Over in the eurozone, inflation was faster than initially reported in March,as the Iran war drove up costs.

Statistics body Eurostat has calculated that consumer prices rose by 2.6% in the year to March across the single currency block, up from an initial estimate of 2.5%.

It says:

The lowest annual rates were registered in Denmark (1.0%), Czechia, Cyprus and Sweden (all 1.5%). The highest annual rates were recorded in Romania (9.0%), Croatia (4.6%) and Lithuania (4.4%). Compared with February 2026, annual inflation fell in three Member States, remained stable in one and rose in twenty-three.

Energy prices were 5.1% higher than a year ago, while services inflation came in at 3.2%, and unprocessed food inflation was 4.2%.

Today’s GDP report suggsts the UK economy began to turn a corner after the Autumn Statement and before the latest developments in the Middle East, says Barret Kupelian, chief economist at PwC:

The UK economy looked to be finding its feet, but geopolitics may yet kick the chair away. Output grew by 0.5% in the three months to February, with both production and services expanding together.

More importantly, this was growth powered by the private sector rather than the public sector-dominated parts of the economy that had propped up much of the post-2023 picture. That suggested the recovery was becoming broader and more durable.

But the question now is whether that recovery can withstand the fresh external shock from the Middle East.

Chris Beauchamp, chief market analyst uk at investing and trading platform IG, says Rachel Reeves and Kier Starmer need to be careful about doing a victory lap:

A look back at last year shows that April 2025 was also good, but then things took a decidedly poor turn. Companies across the UK are warning about the outlook for earnings and consumer spending, and with energy costs hitting consumers hard, today’s good news could turn to dust all too quickly.”

Andrew Wishart, senior UK economist at Berenberg, warns that the Iran war will snuff out the UK’s early 2026 momentum, adding:

Even before the war, we doubted that the economy could enjoy a sustained acceleration. Flat employment, decelerating pay growth and a rising personal tax burden were set to reduce real household spending power.

Now we can add higher energy prices and mortgage interest rates to the list of headwinds. Businesses, meanwhile, face another input cost shock just as they were overcoming the last one (minimum wage and payroll tax hikes). Amid limited pricing power, the squeeze on profitability will probably weigh on output and employment as much as it generates cost-push inflation.

Pre-war, a slowdown in inflation to an acceptable pace should have provided a silver lining to our below-consensus 2026 growth forecast. The new energy price shock means the UK must now endure both weaker growth and higher inflation, postponing bank rate cuts but not derailing them.

Taiwan’s stock market has overtaken the UK, after a surge in the value of its technology sector.

Bloomberg data shows that Taiwan’s market capitalization rose to $4.14trn yesterday, making it the world’s seventh largest, ahead of the UK’s market which was was valued at around $4.09trn.

The landmark came before Taiwan’s benchmark stock index hit a record high today, lifted by Taiwan Semiconductor Manufacturing Co. which reported a 35% increase in quarterly revenue, indicating demand for AI systems remains robust,

Bloomberg says:

“Taiwan continues to be treated as an AI hardware proxy,” said Yoon Ng, head of APAC asset management growth solutions at Broadridge Financial Solutions. “As long as AI capex momentum holds, flows should remain supportive.”

There is some disappoinment in today’s generally uplifting UK GDP report.

It shows that the economy actually stagnated in the second half of 2025, rather than growing by 0.1% in July-September and October-December.

Sandra Horsfield, economist at Investec, explains:

Not all was good news: revisions to back data mean that Q3 and Q4 GDP growth is now reported as zero, whereas it was +0.1% previously for both quarters.

With that, it is quite possible that full-year 2025 GDP growth is revised down in the next quarterly national accounts release: monthly GDP figures point to a growth rate of 1.2%, whereas the latest quarterly national accounts figures had put GDP growth at 1.4%.

(From today, the ONS has changed its revision policy so monthly GDP can now be revised more frequently than before.) So some of the strong February numbers need to be viewed as bounceback from a lower base.

Tesco has warned that profits could fall back in the year ahead amid “increased uncertainty caused by the conflict in the Middle East”.

The warning came after the UK’s biggest supermarket hit its highest share of the market in a decade.

It revealed profits had risen 8.5% to £2.4bn in the year to 28 February as sales rose by 4.3% to £66.6bn, including strong growth in the UK.

The retailer paid shop floor, distribution workers and other frontline staff a £65m “special performance award” in light of the results, while shareholders have received £937m in dividends during the year.

However, the company said it had “widened” its guidance on profits for the year ahead to £3bn to £3.3bn, adding:

“Much will depend upon the duration of the conflict and in particular, the potential implications for UK households and the economy more broadly.”

The UK’s “bumper growth in February” has probably already been largely extinguished by the Middle East crisis, warns Capital Economics.

Ruth Gregory, deputy chief UK economist at Capital Economics, says:

GDP rose by a bumper 0.5% m/m in February but March’s activity PMIs suggest the war in Iran has already all-but extinguished growth. And in our baseline scenario we think GDP growth will slow from 1.4% in 2025, perhaps to just 0.7% this year.

Gregory fears growth will “slow to a crawl in the coming quarters”, saying:

The stronger February outturn than we expected probably meant that GDP grew by 0.6% q/q or so in Q1, rather than 0.3% q/q as we previously thought. But the leap in energy prices means there is unlikely to be much growth after that.

[PMIs are a survey of purchasing managers, which showed the biggest jump in costs since 1992 last month]

Scott Gardner, investment strategist at J.P. Morgan Personal Investing fears the UK’s growth pick-up may not last, due to the Iran war.

“The UK economy beat expectations in February, showing strong growth during the month before the war with Iran broke out. While this is a positive reading, the uncertain situation in the Middle East and resulting spike in oil prices could mean this return to growth is short-lived.

“In February, industrial production and services rose sharply. The rise was partly offset by manufacturing activity contracting. Retail sales fell after a stronger than expected January while the property market remains subdued.

“Looking ahead, the conflict in the Middle East and escalation in the Strait of Hormuz has dented the growth outlook for the UK economy. Oil prices had already been rising in recent months, but the latest spike could be especially painful for businesses and consumers through higher costs and elevated interest rates.

The extent to which the conflict hits UK growth this year will hinge on the duration of the disruption in the Strait of Hormuz and persistence of the oil price shock, Gardner adds.

February’s GDP report shows “the calm before the storm” that is now hitting the UK economy from the Middle East, reports Sanjay Raja, Deutsche Bank’s chief economist.

Raja says February GDP “smashed expectations” by coming in with “a thumping 0.5%” growth month-on-month this morning.

He says it shows forecasters were too pessimistic about UK growth at the start of the year, and predicts we’ll see decent growth of up to 0.6% in the first quarter of this year.

Our nowcast models now show Q1-26 GDP growth returning back to our original forecast from the start of the year: 0.5-0.6% q/q, reflecting some positive payback after a very sluggish second half in 2025. Given today’s data, spending looks stronger than anticipated. And firms may also be investing more than we thought heading into the Iran conflict.

But the impact of higher energy prices, and weaker business investment, will hurt growth this year, he adds:

The good news is that the UK likely entered the energy shock on a stronger footing than many expected. Q1-26 GDP growth will likely hit more than double the quarterly rate many forecasters expected, also lifting annual GDP growth projections. The bad news is that upward GDP momentum won’t last. This will likely be the growth before the energy squeeze.

Households will have already started to feel the impact of the Iran energy shock, impacting disposable incomes and discretionary spending. Pump prices are up over 20% since the oil shock occurred. And dual fuel bills are due to rise by a similar amount over the summer. Businesses will also likely be pulling back investment plans, hiring plans, and lowering wage growth as a result. As such, expect more sluggish growth into Q2-26 (and beyond).”

The UK’s growth acceleration in February is likely to be “short-lived”, due to the Iran war, warns Andrew Hunter, associate director and senior economist at Moody’s Analytics:

“The 0.5% month-over-month jump in U.K. GDP in February, and slight upward revision to January’s data, echoes the earlier improvement in the surveys and suggests the economy had more momentum at the start of this year than previously thought.

However, with those surveys weakening quite sharply in March as the Middle East conflict sent energy prices soaring, this upturn is likely to prove short lived.

The hit to household real incomes and renewed blow to confidence is likely to keep economic growth subdued over the coming months and we have lowered our growth forecasts for this year in our April baseline.”

“Widespread growth” across the UK services sector helped the economy to expand strongly in February, by an impressive 0.5%.

Today’s GDP report shows that 12 of the 14 subsectors of the services economy grew during the month, helping services to grow by 0.5%.

“Administrative and support service activities” made the largest contribution (up 2.0%), due to a pickup in hiring activity.

The second largest positive contribution came from wholesale and retail trade; repair of motor vehicles and motorcycles (up 0.7%).

Professional, scientific, and technical activities also contributed to the growth, with a rise of 0.8% in February 2026.

The UK economy also grew by 0.5% in the three months to February, helped by the end of the cyber-attack disruption at Jaguar Land Rover last autumn.

That’s up from 0.3% growth in the three months to January.

ONS chief economist Grant Fitzner says:

“Growth increased further in the three months to February led by broad-based increases across services.

“Within services, growth was driven by wholesaling, market research, hospitality, and publishing, which all performed well in the three months to February. Meanwhile car production recovered from the effects of the autumn cyber incident.

“Growth in services and production was partially offset by another fall in construction, albeit at a slower rate than previously, with leasing and intellectual property licencing also continuing to contract.”

Newsflash: The UK economy was growing much faster than expected before the Iran war jolted global activity.

UK GDP rose by 0.5% in February, new data from the Office for National Statistics shows. That’s much stronger than the 0.1% growth the City had expected.

The ONS reports that services and production both grew by 0.5%, and construction grew by 1.0% in February.

January’s GDP data has been revised up too – to show 0.1% growth, rather than stagnation.

In normal times would be a significant boost to Rachel Reeves.

However, this data is somewhat historic, as the Middle East conflict is reshaping the prospects for the global economy this year, driving up energy and fuel prices, and borrowing costs, and hurting confidence.

Earlier this week the IMF cut its forecast for UK growth in 2026 to 0.8%, down from 1.3%.

Economic growth in China has accelerated in the last quarter, in an encouraging start to the year for Beijing.

China’s gross domestic product (GDP) grew by 5%, year on year, in the first quarter of 2026, data from the National Bureau of Statistics (NBS) released today shows.

That’s 0.5 percentage points faster than in the fourth quarter of 2025,

The NBS says “The national economy got off to a good start”, explaining:

“The growth of production and supply accelerated, market demand continued to improve, employment was generally stable, market prices picked up moderately, and high-quality development advanced with new and positive momentum.”

Rachel Reeves has announced an expansion of support for the most energy-intensive UK businesses, as they face soaring bills as a result of the Middle East conflict.

The chancellor said the long-promised British Industrial Competitiveness Scheme (BICS) would be expanded to cover 10,000 companies, up from the 7,000 originally announced.

The scheme, which the government says will cut companies’ bills by up to 25%, will not come into operation until next year, although in a significant concession Reeves said support would then be backdated to this month.

The announcement was welcomed by business groups, but some criticised the fact the money would not arrive until next April, urging Reeves to bring support forward as they face a looming crisis as a result of the ongoing closure of the strait of Hormuz.

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

Economic data inevitably has a shelf life, before it’s overtaken by new numbers. But it’s unusual to be out of date even before it’s released!

That’s the situation with the UK’s February GDP report, due to be released at 7am this morning.

It is expected to show some modest growth across the economy, with GDP forecast to have risen by 0.1% (according to the City consensus). Forecasts range from 0% to 0.3% growth.

But the conflict in the Middle East, which began at the end of February, means the UK economy is already in a new world – of higher energy prices, food inflation fears, supply chain disruptions, and geopolitical tensions.

The economy stalled in January, with no growth recorded (although this could be revised today). That, Deutche Bank’s Sanjay Raja says, was a “disappointed”, adding:

With the economy stagnating to start the year, we expect a rebound in February. We don’t discount an upward revision to January GDP either. Our nowcast models point to both a potential upward revision to January and some further upward momentum in February.

What do we see for February GDP? We see GDP expanding by 0.2% m-o-m, lifted by broad-based momentum across the services, production and construction sectors.

The GDP data comes as chancellor Rachel Reeves continues to attend the IMF and World Bank’s spring meeting in Washington DC, where she yesterday described the Iran war as a “mistake” that has destabilised the global economy.

The agenda

• 7am BST: UK GDP report for February 7am

• 10am BST: Eurozone inflation report for March

• 1.30pm BST: US weekly jobless

• 5pm BST: IMF holds debate on the global economy