Iran in circles | Strained Relationship | Inflation Strait

Charles Fletcher
March 27, 2026
12
min read
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Ukrainian President Zelenskyy dials in to a meeting of the Joint Expeditionary Force in Finland, where he said Ukraine was ready to become a full member of the JEF © Bart Maat / Alamy Stock Photo

Driving the Week

War in the Middle East rolled on as it marked a month since US-Israeli strikes on Iran, and despite claims from various sources, it is showing no signs of ending soon. Britain remained in discussions to reopen the Strait of Hormuz, though Iran doesn’t seem too keen, dismissing Donald Trump’s claims they’d had ‘productive conversations’ on the ending of the war, describing these claims as ‘fake news’ – ouch. Having already postponed threats to destroy Iranian energy sources until Friday, he has delayed this once more until April 6th, though he claims this is a request from the Iranian Government as a result of promising talks. It remains very difficult to determine how substantive these ‘reported’ talks with Iran are, but his latest claims have certainly raised eyebrows. He has suggested that Iran had offered a ‘present’ by allowing eight oil tankers to pass through the Strait this week, before revising that figure to ten, and presented this as evidence that negotiations are underway. However, independent verification tells a more restrained story. Analysis from BBC Verify indicated that only five oil-carrying vessels have made the passage during the same period, with no indication any were Pakistani-flagged, as Trump had also noted. It is not beyond the realm of possibility this is all smoke and mirrors, with the US President (and many world leaders…) evidently concerned about volatile oil price increases. With cheap energy having been a central campaign theme ahead of his second term, there are clear incentives for the administration to project progress, whether or not it fully reflects the reality on the ground.

In the UK, Rachel Reeves continued to face pressure from all sides as Britain’s growth took the biggest hit of any of the G20 major economies according to the OECD, with predicted growth falling from 1.2% to just 0.7% this year. Oil and gas prices continue to rise, and the closure of Hormuz is expected to have crippling costs on food prices as a result of the difficulties in fertiliser transportation. The inflation rate isn’t serving the Chancellor much better, as the OECD forecasts UK inflation to hit 4% this year, a hefty increase on the originally forecast 2.5%, making Britain (nearly) the worst in the G7 countries, only just behind the US.

The economic fallout has also hardly been helped by the relationship between Starmer and Trump, which has shown little sign of improving over the past week. Trump once again criticised the UK’s delayed deployment of warships, dismissing them as ‘toys’ compared to America’s arsenal, and claiming he told Britain ‘don’t bother, we don’t need it’ in response to offers of aircraft carriers. Interestingly, a somewhat different side of Starmer emerged in an interview with Sky News’ Beth Rigby, who pressed him on the turbulence in his dealings with Trump. He insisted he is ‘not going to back down’ in the face of mounting pressure and what have been, at times, relentless jibes from across the Atlantic. Whether that Starmer interview provides any comfort can be left open to interpretation, but what is clear, however, is that the conflict is continuing to expose both the UK’s economic fragility and the growing strain in its relationship with the United States.

The Week in Stats

5 – Holyrood candidates that Reform Scotland have lost in eight days: Stuart Niven, Jordan Brown, Roland Jackson, Linda Holt and James Glen.

>50 – Peers (including Sue Gray and Tanni Grey-Thomspon) who have written to MPs saying the assisted dying bill will fall because supporters have refused to ‘address the most serious concerns’.

3% – the inflation rate in the year to February 2026: the same as the previous month.

24 – written statements released on Thursday, the Commons’ last sitting day before Easter Recess.

Up to £476m – in deposits affected by errors from NS&I due to their failure to comprehensively trace accounts for some customers who passed away, with the Bank having misplaced the money of some 37,000 savers.

47 – days until the King’s Speech takes place on 13 May.

11 – the number of weeks Parliament is due to sit before rising for the summer recess.

In Case You Missed it

A Chinese energy company has been blocked from opening the UK’s largest wind turbine manufacturing facility in Scotland. Energy Minister Michael Shanks told the ESNZ Committee on Wednesday that Ming Yang have been prevented from opening the £1.5bn facility near Inverness due to national security concerns, but declined to comment further about the specific advice received. The outgoing Deputy First Minister of Scotland, the SNP’s Kate Forbes, called the decision “sabotage of Scotland’s industrial future”, adding the UK Government has not explained their reasoning behind the decision; whilst the Labour Chair of the ESNZ Committee welcomed it, arguing the “over-reliance on China in strategic sectors leaves Britain exposed to coercion, disruption and unfair competition.”

In the continuing soap opera that is the Peter Mandelson affair, the Westminster bubble went into full conspiracy theory mode this week after it emerged that the Prime Minister’s former Chief of Staff’s phone was stolen just a month after Mandelson was sacked last year. Morgan McSweeney’s phone contained messages on the former US Ambassador’s appointment process, but the Government has yet to confirm if those messages were backed up. Opposition parties have dived in to question the veracity of the phone theft, with the Tories, Reform and SNP all suggesting it’s a cover-up.

Reform launched their local council election campaign in Sunderland this week, with Nigel Farage labelling the 7th May polls a “referendum on our entire political class”. Reform are set to be the biggest winners from the election, and could add over 1,000 seats and a number of councils to their current tally. Labour and the Conservatives are projected to lose as many as 1,000 and 600 seats respectively in return; whilst the Lib Dems and Greens are likely to pick up a few hundred seats each on the night.

The State Opening of Parliament and King’s Speech will take place on Wednesday 13th May, Leader of the House Sir Alan Campbell announced on Thursday. It’s expected the current session of Parliament will be prorogued ahead of the King’s Speech most likely on Thursday 30th April… if the Government can get through the outstanding legislation they want to in time.

Shipbuilding, steel, AI and energy infrastructure will be ‘recognised as critical for national security’, under new Government guidance aimed at helping departments protect the UK’s economic security and build resilience. Further requirements will also be set for steel, with departments either being required to use British steel or to provide a justification if steel is sourced from overseas. A new ‘Public Interest Test’ will be introduced with departments asked to assess whether outsourced service contracts over £1m could be delivered more effectively in-house.

The Government has banned all crypto donations and capped donations from overseas to politicians or parties, following the publication of a review undertaken by former senior civil servant Philip Rycroft. The new rules – which will be implemented through amendments to the Representation of the People Bill that gives 16-year-olds the vote – are a thinly veiled response to the crypto and overseas donations received by Reform UK over the past year. Nigel Farage criticised the new rules as “ridiculous” and “an abuse of power”, hinting Reform may challenge the rules in court.

The ‘toughest crackdown on late payments in over 25 years’ was unveiled by the Business Secretary this week, with the Small Business Commissioner given new powers to investigate poor payment practices, adjudicate payment disputes and fine the worst offenders. Changes announced include a new 60-day cap on payment terms on all large firms when paying small suppliers, a new mandatory interest rate on late payments set at 8% above the Bank of England base rate, the introduction of time limits for raising disputes on invoices, and a ban on the withholding of retention payments under the terms of construct contracts.

Plug-in solar panels will be available to buy at shops like Lidl within months, Energy Minister Michael Shanks announced on Tuesday, to enable households an easy way to cut energy bills. The plans were announced alongside the implementation of the new Future Homes Standard, which includes ‘common-sense measures to ensure the majority of new homes are built cheaper to run, with solar panels and clean heating as standard'.

43 councils and 800 councillors are set to be scrapped in one of the biggest shakeups of local government in a generation. Local Government Secretary Steve Reed announced five new unitary councils in Essex, four in Hampshire, Portsmouth and Southampton, and three each in Norfolk and Suffolk replacing the existing councils, expanding a number of city councils in an attempt to increase the number of houses built locally. Electorally, the changes are likely to benefit the Labour Party, who are more likely to run urban rather than rural councils, with Shadow Local Govt Secretary James Cleverly calling it “gross gerrymandering”.

It was a big week for Government appointments… Perm Sec at the Department for Business and Trade, Gareth Davies, has been appointed the new Perm Sec at the Home Office; the MOD announced Air Commodore Polly Perkins as the preferred candidate for Armed Forces Commissioner; and David Taylor MP has been appointed as the UK's Trade Envoy to Japan. Look out for our new Musical Chairs section after Easter – bringing you the week’s top movements in Westminster, Whitehall and beyond.

Mandatory ethnicity and disability pay-gap reporting will be introduced for large employers, as firms with 250 or more employees will be required to publish six key pay gap metrics and new workforce composition data. The new measures will build on the current gender pay gap reporting and will be introduced in the Equality (Race and Disability) Bill, expected to be reconfirmed at the King’s Speech.

The Scottish Government squeezed out its plan to tackle climate change up to 2040 before heading into purdah ahead of the Scottish Parliament elections in May. Hoping they’ll be returned to power on 7th May to enact the proposals, the plan includes over 150 actions to reduce greenhouse gas emissions over the next 15 years, including decarbonising heat in buildings by 2045, phasing out the need for new diesel and petrol cars by 2030, planting 18,000 hectares of new woodland every year from 2030, and increasing peatland restoration by 10% each year to 2030.

Highlights from Parliament

The fallout from the war in the Gulf continued to dominate the House of Commons this week, kicking off on Monday with a statement on the situation from Defence Secretary John Healey and another from Chancellor Rachel Reeves on Tuesday, followed by much scrutiny of rising energy bills and the gaps in Britain’s defences from the Conservatives in two opposition day debates. The earlier days of the week also saw consideration of Lords’ amendments to the Tobacco and Vapes Bill and the National Insurance Contributions Bill. Tory leader Kemi Badenoch stuck to her favourite lines of attack in PMQs, repeatedly blaming the Prime Minister for rising prices and accusing him of being cowed by Energy Secretary Ed Miliband into continuing to oppose expanding North Sea oil and gas licences. Turning to Britain’s borders, Reform MPs staged a dramatic walkout, clarifying that they had checked out of the chamber to protest what they saw as the paucity of the PM’s response to Reform leader Nigel Farage’s question on small boat crossings. Members also discussed the antisemitic arson attack in Golders Green. The week also featured examination of Lords’ amendments to the Victims and Courts Bill, Transport Questions, debates on support for Gurkha and nuclear test veterans and the Lucy Letby case, as well as ministerial statements on foreign interference in elections, national savings and investment, and resident doctors’ strikes.

Members were able to remain seated on the red benches to focus on more legislation, with the House of Lords covering the report stages of the Pension Schemes Bill and the English Devolution and Community Empowerment Bill, as well as the third reading of the Crime and Policing Bill, and consideration of Commons’ amendments to the Children’s Wellbeing and Schools Bill and the National Insurance Contributions Bill, before continuing with the committee stage of the Terminally Ill Adults (End of Life) Bill on Friday (and breath). The Lords, soon to be down a few Hereditary Peers, also found time to consider questions on offshore wind, defence, fuel supplies and aid to Ukraine, the accessibility of public transport, the Cranston Inquiry Report, the Government’s AI growth lab, and the issue of antisemitism.

Polls and Think Tanks

As King Charles’ trip to the US approaches, a new YouGov survey shows that almost half (49%) of Britons are opposed to the trip, compared to a third (33%) who would like it to go ahead. Green voters lead in opposition (70%), followed by the Liberal Democrats (65%)… unsurprising given that their leader, Ed Davey, has called for its cancellation earlier this month, and then Labour (62%). Meanwhile, 63% of Reform UK voters are in favour of the trip, while Conservatives are split on the issue.

Is Rhun ap Iorwerth set to become the next First Minister of Wales? As politicians across the UK rise for Easter recess, YouGov’s first MRP model of the 2026 Senedd election projects Plaid Cymru to win 43 seats, six short of a majority, potentially ending Labour’s long-standing dominance in Welsh politics, with Labour forecast to fall to just 12 seats. Reform UK is projected to come second with 30 seats, while the Greens are expected to win 10. The Liberal Democrats are forecast to lose both of their seats, while the Conservatives are projected to return with just a single seat.

Nearly two thirds of UK adults aged 18-75 support the assisted dying bill being passed into law, according to a poll from Ipsos. As the Bill continues its never-ending committee stage in the House of Lords, the poll found that 15% of respondents strongly or tend to oppose it, while a further 15% neither support nor oppose it. By contrast, 65% say they strongly or tend to support the Bill.

You’ve Got to Laugh

Nigel Farage was spotted this week attempting a one-man transfer to Ipswich Town F.C, turning up at Portman Road to film promotional content, during which he brandished a No.10 shirt bearing his own name and hinted that he may be in the running for the manager’s job (though, in his own words, “there’s only one job I’m really after”).  Reports, however, suggest the visit was booked without using Reform or Farage’s name, while the shirt was bought from the club shop, rather than handed over like a new signing. The whole episode has proved more than a little controversial among the Tractor Boys, perhaps, one could say, even a touch offside… Local rivals Norwich City were also very quick on the counter-attack, not one to miss an open-goal (despite their league position), having advertised their own tours with a reminder that “terms and conditions will most definitely apply.” As for the league table…some of us are keeping our eyes further up north…UTB!

If there’s one thing Westminster loves more than most places, it’s jumping on a bandwagon… and so we had to say fair play to Feryal Clark MP, who kicked one said bandwagon out the way with a pretty funny and playful comparison this week. As much of the media and internet were kicking off at the idea of Argos selling a Wooden Influencer Roleplay set (for two years and over), Times Radio interviewed the new Chair of the Digital Creators APPG, asking her if it was the “worst thing she’d ever seen”… Putting the whole thing in perspective, the Enfield North MP replied “No… I mean, my little one has lots of mermaids… do I think she’s going to turn into or aspires to be a fish? No, she doesn’t” Brilliant

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