The Office for Budget Responsibility\u2019s new Spring Forecast could, in happier times, have brought the chancellor good news this afternoon.<\/p>\n
Economists predict they will show that the UK is still keeping within the OBR\u2019s fiscal forecasts \u2013 helped by a record budget surplus in January<\/a> \u2013 and that inflation is heading down towards target.<\/p>\n However, the Middle East crisis mean such predictions are out of date before they\u2019re even published, as the world faces the threat of a new energy crisis.<\/p>\n Yesterday, liquefied natural gas (LNG) prices rocked by over 40%, and oil rose by over 7%, after Qatar\u2019s state-run energy firm halted LNG production and Saudi Arabia temporarily shutting down some units of its massive Ras Tanura oil refinery following attacks by Iran.<\/p>\n A chart showing European gas prices<\/a><\/p>\n These moves, as the US-Israel war on Iran rages, risk reigniting the cost-of-living crisis.<\/p>\n As economists at Investec explain:<\/p>\n double quotation markThe main economic consequence of higher energy prices would be to boost inflation.<\/p>\n In the UK, illustratively, the current level of the oil price would, if maintained, add about 0.2%pts to headline inflation via higher petrol prices; and a sustained 40% shift up in natural gas price futures would boost this by a further 0.7%pts or so, via higher household utility bills.<\/p>\n We\u2019re not expecting major policy changes today, as the government has committed to holding just one major fiscal event each year in the autumn. That\u2019s why it\u2019s billed as the \u2018spring forecast\u2019 not the \u2018spring statement\u2019.<\/p>\n Instead the chancellor is expected to insist the government has the \u201cright economic plan for the country\u201d in a \u201cyet more uncertain\u201d world.<\/p>\n Reeves is expected to tell MPs:<\/p>\n double quotation mark\u201cStability in the public finances, investment in infrastructure and reform to our economy.<\/p>\n Building growth not on the contribution of a few people or a few parts of the country, but in every part of Britain with a state that doesn\u2019t stand back, but steps up.\u201d<\/p>\n The agenda<\/p>\n 8am GMT: Worldpanel supermarket inflation and sales figures<\/p>\n 9.30am GMT: ONS data: Mergers and Acquisitions involving UK companies: October to December 2025<\/p>\n 10am GMT: Flash estimate of eurozone inflation in February<\/p>\n 12.30pm GMT: spring forecast statement from Chancellor Rachel Reeves<\/p>\n 1pm GMT (roughly): Office for Budget Responsibility\u2019s spring forecasts published<\/p>\n 2.30pm GMT: Office for Budget Responsibility press conference<\/p>\n Share<\/a><\/p>\n Updated at\u00a002.14 EST<\/p>\n Key events<\/p>\n Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/p>\n UK grocery inflation rises<\/p>\n UK grocery price inflation has risen, showing that people are being hit in the pocket even before the surge in energy prices feeds through to the economy.<\/p>\n Data provider Worldpanel by Numerator has reported that annual grocery inflation rose to 4.3% in February, after four consecutive months of falls, in a blow for households. That\u2019s up from 4% in January.<\/p>\n Share<\/a>FTSE 100 sheds 1% as European markets fall again<\/p>\n European stock markets have opened with fresh falls, as the Middle East crisis continues to grip bourses around the region.<\/p>\n In London the FTSE 100 share index has dropped by 104 points, or almost 1%, to 10,667 points at the start of trading, a one-week low.<\/p>\n Insurance group Prudential (-3.5%) are the top fallers, followed by precious metals producer Fresnillo (-3.6%), and mining giants Antofagasta (-3.5%) and Anglo American and (-3.2%).<\/p>\n There are only seven risers on the index, including energy producers BP (+1.6%) and Shell (+0.35%).<\/p>\n Derren Nathan, head of equity research at Hargreaves Lansdown, says:<\/p>\n double quotation markSentiment towards BP and Shell has strengthened significantly off the back of oil price spikes. But it\u2019s a complex picture. Neither company has production in Iran. But BP\u2019s significant production in Iraq and Abu Dhabi risks being bottlenecked through disruption to the Strait of Hormuz. For Shell the same applies to its LNG facilities in Qatar and the Emirates. If a moderate sustainable regime is established in Iran, there is the potential for substantial derisking, and for prices to be rebased downwards. If sanctions are removed, it also opens the door for investment into Iranian oil fields.<\/p>\n But uncertainty remains high. This could prove to be highly profitable for both Shell and BP\u2019s trading arms with Shell\u2019s optimisation capabilities in LNG transit likely to be in particularly strong demand. Shell\u2019s balance sheet strength also leaves it better placed to deal with any prolonged volatility and while BP\u2019s buybacks remain on pause, we\u2019re expecting Shell\u2019s generous payouts are likely to continue this year.<\/p>\n Germany\u2019s DAX index has fallen by 1.75%, Spain\u2019s IBEX lost 1.4% at the open and France\u2019s CAC 40 is down by 1.25%.<\/p>\n Share<\/a> Heathrow boss Thomas Woldbye received a total pay package of \u00a33.8m last year \u2013 up 14% from \u00a33.3m in 2024, despite the controversy around his handling of the power outage at the airport in March that messed up the travel plans of 200,000 passengers.<\/p>\n Or rather non-handling, as he was fast asleep, leaving Heathrow\u2019s chief operating officer Javier Echave to deal with the outage, after a<\/a> fire at a nearby substation knocked out power supplies<\/a> to the airport.<\/p>\n Woldbye later expressed his \u201cdeep regret\u201d at being uncontactable and sleeping through the crisis The outage at Europe\u2019s busiest airport has raised questions over the resilience of the UK\u2019s ageing national infrastructure.<\/p>\n A Heathrow-commissioned inquiry run by former transport secretary Ruth Kelly found Woldbye was not woken by emergency notification alerts and several calls from Heathrow\u2019s chief operating officer because his mobile had gone into silent mode \u201cwithout him being aware\u201d and he described it as a \u201ctechnical glitch\u201d. Asked at a later event in Westminster if he had since obtained \u201can extra loud phone,\u201d Woldbye replied: \u201cOh, absolutely. And more.\u201d<\/p>\n The company\u2019s annual report shows his annual bonus rose to \u00a31.4m from \u00a31.3m last year, while long-term share bonuses bonuses increased to \u00a31.3m from \u00a31.1m. His salary was also raised, to \u00a3850,000 from \u00a3775,000. His benefits including a cash travel allowance climbed by 16% to \u00a3130,977 and pension contributions were up 4.7% to \u00a387,006.<\/p>\n Share<\/a>UK gas price contract soars again<\/p>\n UK gas prices are climbing \u2013 adding to the risks of an inflation spike.<\/p>\n The month-ahead UK gas futures contract, for delivery in April, is up 18% this morning at 135.5p per therm, following a 40% jump on Monday<\/p>\n That\u2019s the highest since February 2025, and almost twice as high as its level in the middle of last month.<\/p>\n However, it\u2019s still much lower than in the early days of the Russia-Ukraine war in 2022, when the month-ahead gas price briefly rose over 500p\/therm.<\/p>\n Share<\/a><\/p>\n The pound is weakening again this morning too, approaching lows seen during yesterday\u2019s volatile trading.<\/p>\n Sterling is down two-thirds of a cent, or 0.5%, at $1.3342 against the US dollar, which is up against a basket of other currencies too.<\/p>\n Share<\/a>Oil rising again<\/p>\n The oil price is rising again this morning, as the Middle East crisis threatens energy supplies.<\/p>\n Brent crude, the international benchmark, is up 3.2% at $80.24 a barrel, adding to Monday\u2019s 7.2% rise.<\/p>\n There is ongoing confusion over the status of navigation in the strait of Hormuz after a general in Iran\u2019s Revolutionary Guards threatened to \u201cburn any ship\u201d seeking to navigate the waterway, a vital route for oil and gas shipments.<\/p>\n But US Central Command said the strait \u2013 through which a fifth of global oil and gas travel \u2013 was not closed, according to Fox News.<\/p>\n However, leading maritime insurers have cancelled war risk cover for vessels operating in the Gulf, driving up freight costs and deterring shipping companies from sailing through the strait.<\/p>\n Share<\/a>Rachel Reeves\u2019s plans could be hit by Middle East conflict, say economists Soaring global energy prices as a result of the widening Middle East conflict will jeopardise Rachel Reeves\u2019s plan to conquer inflation and rekindle growth, economists have warned as she prepares to deliver her spring forecast later today.<\/p>\n Responding to the latest projections from the independent Office for Budget Responsibility (OBR), the chancellor will insist she has \u201cthe right economic plan for our country, in a world that has become more uncertain\u201d.<\/p>\n The new forecasts are expected to show the public finances moving in the right direction, with the \u00a322bn fiscal buffer she left herself against her fiscal rules in the November budget little changed.<\/p>\n However, experts said the OBR projections could soon look out of date, if Monday\u2019s surge in oil and gas prices<\/a> proves long-lasting.<\/p>\n Share<\/a>Asia-Pacific shares drop again<\/p>\n Asia-Pacific stock markets have fallen again today, as the Middle East crisis continues to alarm investors.<\/p>\n In Tokyo, the Nikkei 225 index has fallen by 3%, while China\u2019s CSI 300 index is down 1.5%.<\/p>\n In South Korea, where the stock market was closed yesterday, the KOSPI index has tumbled by almost 8%.<\/p>\n Ipek Ozkardeskaya, senior analyst at Swissquote, says:<\/p>\n double quotation markGeopolitical risks are rising \u2013 not easing. Volatility is increasing alongside trade and geopolitical uncertainty, and the risk of renewed inflation could tighten global financial conditions.<\/p>\n Share<\/a>ECB\u2019s top economist: Lengthy Iran war could cause inflation \u2018spike’<\/p>\n The European Central Bank\u2019s chief economist has warned that a prolonged war in the Middle East and a persistent fall in oil and gas supplies from the region could cause a \u201csubstantial spike\u201d in inflation.<\/p>\n Philip<\/a> <\/a>Lane<\/a> has told the Financial Times<\/a> said that \u201cdirectionally, a jump in energy prices puts upward pressure on inflation, especially in the near term.\u201d<\/p>\n Lane said the impact would depend \u201con the breadth and duration of the conflict\u201d, adding:<\/p>\n double quotation mark\u201cThe impact would be amplified if it also gave rise to a repricing of risk in financial markets\u201d.<\/p>\n Share<\/a>Introduction: Reeves to respond to spring forecast after oil and gas prices surge<\/p>\n Good morning.<\/p>\n \u201cEvents, dear boy, events\u201d. Rachel Reeves may have the (probably apocryphal, oft-quoted<\/a>) wisdom of Harold Macmillan in mind today, as she responds to the latest official assessment of the UK economy.<\/p>\n The Office for Budget Responsibility\u2019s new Spring Forecast could, in happier times, have brought the chancellor good news this afternoon.<\/p>\n Economists predict they will show that the UK is still keeping within the OBR\u2019s fiscal forecasts \u2013 helped by a record budget surplus in January<\/a> \u2013 and that inflation is heading down towards target.<\/p>\n However, the Middle East crisis mean such predictions are out of date before they\u2019re even published, as the world faces the threat of a new energy crisis.<\/p>\n Yesterday, liquefied natural gas (LNG) prices rocked by over 40%, and oil rose by over 7%, after Qatar\u2019s state-run energy firm halted LNG production and Saudi Arabia temporarily shutting down some units of its massive Ras Tanura oil refinery following attacks by Iran.<\/p>\n![\"Julia](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2026\/03\/Julia-Kollewe,-L.png\")
Julia Kollewe<\/p>\n![\"Heather](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2026\/03\/Heather_Stewart,_L.png\")
Heather Stewart<\/p>\n