Wizz Air issues profits warning due to Middle East crisis
The travel disruption, the higher oil price and the fall in the euro caused by the Iran war has prompted low-cost airline Wizz Air to issue a profits warning.
Wizz Air warned investors last night that it believes the current crisis in the Middle East will wipe €50m off its profits this financial years.
Wizz had previously predicted that earnings would fall within a profit of €25m to a loss of €25m, so today’s warning means it expects a loss for the year.
The company told the City:
double quotation markIn terms of the expected impact, approximately one third is a result of the cessation of certain scheduled services to the Middle East, with the remainder from the adverse movement in macroeconomic factors as a result of the Iran conflict.
Our assessment of the impact of these macroeconomic factors is based on jet fuel and US$/€ rates as of today, and assumes that these rates will remain at current levels for rest of Fiscal Year 2026.
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HSBC, Nationwide and Coventry building societies are the first big UK lenders to announce an increase in rates on their fixed mortgage deals as a result of the Middle East crisis, with brokers predicting others are likely to follow.
Experts have said the war could trigger an energy price shock that pushes up UK inflation, which may in turn force the Bank of England to increase interest rates.
That uncertainty has affected the money market swap rates that lenders use to decide the rates on their new fixed mortgages. Aaron Strutt at the broker Trinity Financial said these were the first large lenders to announce rate hikes “based on the funding cost increases brought on by the chaos in the Middle East”.
It’s been another volatile day in the markets. The UK’s FTSE 100 is now in the red again – down 102 points or 1% at 10,464 points.
Oil is up 3.3%, while European gas prices are slightly higher this afternoon.
Ministers are discussing the possibility of intervening to protect the public against soaring household energy bills if the Middle East conflict drags on.
Oil and gas prices have surged since Donald Trump started his bombing campaign against Iran, which has responded by closing off a crucial shipping route through the strait of Hormuz and by attacking regional energy infrastructure.
Household energy bills are fixed until July, when the energy price cap is next set by the regulator, Ofgem. Forecasts suggest it could then rise by 10%, adding £160 a year to the average bill.
The Japanese carmaker Nissan has reportedly said it could be forced to close its plant in Sunderland if the UK is not fully included in new “Made in Europe” manufacturing rules proposed by the EU.
The UK car industry trade representative group also said it was “gravely concerned” about the proposals it said could damage the £70bn annual cross-channel trade.
Shipping giant MCS has announced a new ‘emergency fuel surcharge’ on cargo from Northern Europe and the Mediterranean to Australia and New Zealand.
MSC 🚢 | Shipping Update
✅ To apply Emergency Fuel Surcharge (EFS) on cargo from Northern Europe to the Indian Subcontinent
✅ Effective 16 March 2026 until further notice
✅ Charges set at $100/TEU (dry units) & $150/TEU (reefer units)
Reflects rising fuel costs & shipping…
— CapitalInsight (@CapitalInsight3) March 5, 2026
Former Bank of England policymaker Michael Saunders reckons the Bank of England’s Monetary Policy Committee is likely to remain on hold for now.
In a new report, Saunders – now of Oxford Economics – says:
double quotation markGiven uncertainties and (in line with a robust control approach of avoiding actions that could go badly wrong), the MPC is unlikely to cut rates at the upcoming March meeting. If energy prices quickly fall back, it will probably resume easing, either in April or June. Our new base case will still assume a second cut later this year. But if the surge in energy prices persists or expands, the MPC will be set for an extended pause.
Given that policy remains somewhat restrictive, the Committee is unlikely to hike rates unless inflation expectations rise significantly.
Wall Street has opened in the red,
The Dow Jones industrial average has dropped by 299 points, or 0.6%, to 48,439 points. Pharmaceuticals groups Merck (-2.7%) and Amgen (-2%), consumer goods maker Johnson & Johnson (-2.5%), are leading the fallers.
ING have pushed back their forecast for the next cut in UK interest rates:
double quotation markUnless energy prices rapidly fall back, we now expect the next Bank of England rate cut to come in April rather than this month. But with the jobs market under pressure, further easing remains likely.
The US jobs market remained solid in the build-up to the Iran war, new data shows.
The number of Americans filing new claims for unemployment benefit was unchanged last week, with 213,000 fresh “initial claims” for jobless support filed.
The main economic impact for most countries from the Iran crisis is that the recent rise in oil prices to around $80/bbl will boost inflation and slow growth, say Goldman Sachs.
In a research note, they outline how this will work out:
double quotation markApplying our standard rules of thumb with our commodities team’s updated forecast implies a 0.2pp boost to global inflation (with core inflation impacts <0.1pp) and 0.1pp drag on global growth.
Effects could be larger if the Strait of Hormuz closes for an extended period. If oil prices temporarily rise to $100/bbl, we estimate that global headline inflation could rise by 0.7pp and global growth could slow by 0.4pp.
Data provider Moneyfacts has reported that the average mortgage rates are slightly higher today:
The average 2-year fixed residential mortgage rate today is 4.83%. This is up from 4.82% the previous working day.
The average 5-year fixed residential mortgage rate today is 4.95%. This is up from 4.94% the previous working day.
There are currently 7,673 residential mortgage products available. This is up from 7,640 the previous working day.
ShareSlower UK interest rate cuts likely
Slower UK interest rate cuts are more likely than rate hikes, consultancy firm Capital Economics argues.
Ruth Gregory, their deputy chief UK economist, says:
double quotation markWhile parallels are being made with the energy price shock caused by the Russia-Ukraine war in 2022, the rise in energy prices as a result of the conflict in the Middle East has so far been smaller than that in 2022 and the economic backdrop is very different.
So unless energy prices rise further and/or a major fiscal stimulus is announced, slower interest rate cuts are more likely than interest rate hikes.
Currently, the money markets are only anticipating one cut to UK interest rates by the end of this year, down from two before the Iran conflict began.
Updated at 07.47 EST
The recent turmoil in the markets hasn’t deterred UK fintech Revolut from pressing on with its plans for banking domination.
Revolut hsa filed an application for a banking licence in the US, a move which would allow it to offer more products to Americans.
Today, we officially filed our application for a U.S. banking license.
This is a major milestone in our mission to build the world’s first truly global bank.
— Revolut (@Revolut) March 5, 2026
And for our U.S. customers, a license will allow us to move faster and deliver more, including:
• Rapid product innovation: We’ll own the end-to-end experience ourselves.
• FDIC insurance: Customers’¹ deposits will continue to be insured by the FDIC.
• Real-time…
— Revolut (@Revolut) March 5, 2026
Revolut secured a UK banking licence – with “restrictions” – in summer 2024…