A US fighter jet was downed over Iran, sparking a search for its two-person crew; one has been rescued. Iranian state-linked reports said local forces brought it down. The US president condemned the incident and urged raising defence spending to $1.5tn.
Starmer pivots towards closer EU alignment after Trump’s remarks strained trust. He seeks a defence and economic pact to bolster Western security and growth, prioritises a summer summit, aims to help reopen a key maritime strait, and signals he will resist US pressure where UK‑EU interests align.
Starmer sets a tilt to Brussels, seeking deeper UK‑EU cooperation on defence and the economy after Trump’s comments strained trust. He wants deals at a summer summit, coordination to secure key shipping lanes, and says Britain will resist US pressure where interests diverge.
Brent crude rose past $119, heading for a record monthly jump, as Middle East tensions unsettled supply expectations. Markets faltered, with equities slipping and borrowing costs edging up. Washington urged partners to raise output while leaving the option of further action open.
French AI group Mistral has secured $830m in debt to build European data centres, boosting compute for its models and supporting a push for digital sovereignty. The plan offers an alternative to US providers, though analysts warn of possible overcapacity and high financing costs.
Distressed investors say turmoil in private credit offers the biggest opening since 2008. With rates high, borrowers face refinancing stress and forced sales, while cash calls pressure major managers. Software firms reliant on leveraged loans are seen as particularly exposed to valuation resets.
The OECD warns the UK will see the biggest G20 hit to growth from the energy price shock, with inflation rising fastest after the US. Elevated bills will squeeze firms and households, making the BoE’s rate decisions harder and posing an early setback for the PM’s economic agenda.
Western officials report a major European power has sent drones, medicines and food to Iran, the first clear sign of military support. The shipments deepen ties and could expand Iran’s capabilities. Tehran denies related claims about contacts over a previous US deal.
VW is considering a move into defence manufacturing via a partnership with Israel’s Rafael, repurposing a struggling Lower Saxony plant to protect thousands of jobs. The tie-up would supply European buyers with air-defence components, subject to political sign-off and board approval.
Trump promotes a diplomatic path to end the Middle East crisis, calling off planned military action against Iran’s energy facilities. Oil prices fell as markets stabilised. Tehran says no talks have occurred with Washington, while the Pentagon positions additional forces in the region.
Trump has escalated pressure on Tehran, warning of action against energy facilities if traffic through the Strait of Hormuz remains blocked. Tehran threatened reciprocal moves on vital infrastructure, while Israel readies increased operations, heightening LNG supply risks within days.
UK borrowing costs have hit an 18-year high as gilt yields top 5%, prompting banks to pull mortgage deals. Traders bet inflation will prove stickier and rates stay higher for longer, lifting swap costs. The squeeze threatens the housing market and piles pressure on the PM and chancellor.
Global markets slid as investors priced in a prolonged energy shock linked to a geopolitical crisis. Oil and European gas jumped, inflation risks mounted and bond yields rose. Central banks cautioned that price pressures may persist, lifting expectations of faster tightening across the West.
US rates were kept on hold, but the Fed signalled it still aims to cut later this year despite a jump in oil prices. Powell said inflation is easing, though geopolitical risks cloud the outlook. Markets read the guidance as steady progress towards loosening, contingent on data.
The head of the US counterterror centre resigned, revealing splits in Trump’s circle over policy on Iran. He said there was no imminent threat and criticised lobbying influence. The departure raises doubts about strategy and pressures Washington and allies to seek restraint.