Iran: uncertainty

By Richard North - March 11, 2026

So far this year, we’ve had a tumultuous time, with any number of foreign adventures dominating the headlines, from Venezuela in early January to the current bombing of Iran, not forgetting the Epstein/Mandelson soap opera which has kept the hacks engaged.

Given the inability of the contemporary media to focus on much more than one topic at a time, this means that many issues are not getting the exposure they should, with whole chunks of both domestic and foreign policy sliding past with barely any mention and little emphasis – apart from a certain by-election.

As part of the more general phenomenon, we have the “one war at a time” syndrome, where it seems that the media can only cope with reporting one major conflict at a time. With Iran absorbing most of the media attention, Gaza and the occupied territories in Israel have disappeared from sight, and even Ukraine is struggling to get a look in.

Sudan as a war zone never did get much coverage, despite the horrendous humanitarian crisis developing there – if ever there was an unfashionable war, that is it. And then, only weeks ago Pakistan declared war on Afghanistan after bombing Kabul after a number of border raids along the Durand line. Reporting of that has vanished, even though the implications for the UK may be profound.

On the domestic front, I see that a Bill to remove hereditary peers from the Lords had been passed, soon to lead to the ejection of the remaining 92, so ending hundreds of years of history with barely a whimper. Of course, the Lords needs reform and there is a major debate to be had, but this change barely touches the underlying problems and strikes me more as an example of Labour vindictiveness.

Even the government’s social cohesion strategy, which I thought might get significant media attention, has passed with barely a ripple and yesterday saw Labour MPs approve the second reading of the Bill to restrict jury trials, despite massive opposition from the legal profession and unease amongst MPs. This should be splashed across the front pages, but it scarcely gets a mention.

To an extent, this is understandable. The war in Iran is important and the conflict seems to be spiralling out of control as US forces interdict Iranian mine-laying efforts in the Straits of Hormuz and the prices of petrol and gas rocket, as the cost of living soars.

As we watch this conflict with fascination (who can avoid being transfixed by the drama?), there can be few people who are not hoping for a speedy end and a return to some sort of stability. Therefore, despite all the other issues demanding our attention, there is probably nothing more important (certainly for this blog) than looking for clues as to how the war might draw to a close.

A few days ago, I picked up on a piece in the Telegraph which suggested three possible scenarios for how the war might end, and now it is the turn of The Times which is running an article headed: “Three ways the Iran war could end – and the implications for UK”.

This paper looks at the issue from a completely different perspective. While the Telegraph talked in terms of a regime collapse, a deal with the West, or civil war, The Times frames its offerings in the context of timing, looking at a conflict that might last only a few more weeks, one that ran to the end of May and the third of three scenarios where we are faced with a long-term conflict.

In the short-term scenario, the paper takes its cue from Trump suggesting that an end to the conflict could be in sight when he said that the war was “very complete, pretty much”, although this is taken not so much as a statement of the reality as words to reassure the financial markets.

This, we are told, has worked, at least in the short term, as stock markets have rallied and the price of a barrel of oil, which had reached $120 dropped back to below $90.

From this, it transpires that The Times is looking at the war end from a very narrow economic perspective, with scant regard for the geopolitical effects, either inside Iran or on the wider region, spreading to involve even Russia and China.

All we get to know is that a “short, sharp operation” would have a limited impact on inflation and growth. Prices would probably be only marginally higher than currently predicted, while the GDP could fall by less than 0.2 percent from current projections.

And, while the Bank of England is still unlikely to take the risk of cutting interest rates when it meets later this month, says the paper, it is likely this would just be a delay rather than an outright cancellation of expected rate cuts this year.

The same limited perspective is taken with the medium-term scenario, where Trump decides that the US military objectives in degrading Iran’s missile and military infrastructure have not been met and the conflict drags on to the end of May.

Other factors that might see it prolonged include Iran refusing to stop its attacks on oil and gas infrastructure or refusing to allow tankers through the Strait of Hormuz, forcing the US to continue operations for longer. There is also a danger, the paper says, of events escalating, inadvertently or otherwise, for example after a large-scale loss of civilian life from an Iranian attack in the Gulf.

In that case, the impact on both the global and British economy becomes more profound. Oil supplies from the Gulf continue to be limited, with prices hitting $130 per barrel, while gas prices rise even more steeply to €100/MWh because of Qatar’s critical role in supplying 20 percent of the world’s total liquid natural gas, which has to pass through the Strait of Hormuz.

This scenario has households seeing steep rises in their home gas and electricity bills in June, which could increase by as much as £344; petrol prices could hit a record high of £2 a litre; the global fertiliser supply chains could also face significant disruption as about a third of the global trade in the raw materials for fertiliser passes through the region.

Inevitably, this will have an impact on food prices and inflation. The Office for Budget Responsibility predicted fall in inflation, from 3 to 2 percent this year, could be entirely wiped out, and the Bank of England would almost certainly scrap plans to reduce interest rates this year, putting continued pressure on family finances.

As to the long-term scenario, this might develop where the Iranian regime does not fall and refuses to accept a US ceasefire, continuing to attack American and Gulf assets in the region. This might force Trump (and the Israelis) to continue the conflict longer than would be preferred.

Again, we only get a look at the economic impact, which would be severe and long-lasting. Yesterday, we are told, Saudi Aramco – the world’s biggest oil producer responsible for about a tenth of global supply – warned of “catastrophic consequences” if the war drags on. Earlier, Saad al-Kaabi, Qatar’s energy minister, warned that the disruption to energy supplies had the potential to “bring down the economies of the world”.

In this scenario, we must expect Brent crude oil prices could rise to an average of $150 a barrel over the next six months, while gas prices could average €120/MWh. Global GDP growth would average just over 1 percent, with many countries pushed into recession. In the UK, GDP is predicted to fall by up to 0.7 per cent from its current predicted growth of 1.1 percent.

Here, inflation would also spike, with pressure on the Bank of England to raise rather than cut interest rates, impacting on government borrowing and possibly forcing further tax rises.

What the paper doesn’t mention is the broader economic impact where global instability might trigger another financial collapse on the scale experienced in 2008, creating the conditions for a global recession and the concomitant rise in political instability.

For the moment, though, as the bombers fly, the only thing we have to work on is uncertainty – and that is not a happy place to be.