Key facts
- The US conducted "powerful strikes" on Iran overnight.
- Iran vowed a "crushing response" and claimed to have hit US military sites.
- The conflict has caused oil prices to surge.
- Brent crude rose to $76 per barrel.
- A Middle East peace deal has broken down.
- Donald Trump stated he no longer wants to do a deal with Iran.
Global markets are anticipating a shift towards risk aversion following overnight strikes exchanged between the US and Iran. The US conducted "powerful strikes" on Iran, which Central Command stated were in response to Iran targeting commercial shipping. Iran has vowed a "crushing response" and claimed to have hit US military sites in Bahrain and Kuwait. This escalation marks the breakdown of a fragile ceasefire that was set to expire in August, following weeks of negotiations on contentious issues including Iran's nuclear program and control of the Strait of Hormuz. The renewed tensions have impacted the UK economy, with 10-year gilt yields rising significantly. President Donald Trump has also suggested he no longer wishes to pursue a deal with Iran, stating, 'Let’s just finish the job.'