Welcome back to the City AM liveblog.
Markets are set to start off the new week facing renewed threats on both the domestic and geopolitical front.
Over the weekend, fractures that were forming in the US-Iran peace deal burst wide open after Iran’s top military command said it shut the Strait of Hormuz after “violations” of the ceasefire.
The regime in Tehran said the closure was a response to Israel’s continued attacks in southern Lebanon, according to Iran’s semi-official Tasnim news agency. In the two nation’s memorandum of understanding (MOU) – that was signed on Friday in a bid to end the war – a clause details the “immediate and permanent termination of military operations on all fronts, including in Lebanon”.
In response to Iran’s closure, President Donald Trump threatened to impose a toll on ships passing through the strait.
The President told Fox News on Sunday that Iran “won’t have a country” if the Strait of Hormuz is closed.
“You won’t even make it back to your f****** country, we’ll take over the rest of the country,” he said.
The narrow waterway, which sits between the Persian Gulf and the Gulf of Oman, has been the central driver of global economic consequences from the Iran war with traffic grinding to a halt form the end of February. Prior to the conflict, around a fifth of the world’s oil supply would flow through.
Vice-president JD Vance launched negotiations on Sunday with Tehran’s negotiators in Switzerland over Iran’s nuclear program and establishing long-term peace following Friday’s deal. Talks are expected to continue throughout the week.
Investors in the domestic-focused equities on the London Stock market will also be keeping an eye on developments in Westminster, with reports suggesting Prime Minister Sir Keir Starmer will resign today.
The Labour leader has faced mounting pressures since the local elections and the return of Andy Burnham – who officially becomes an MP this afternoon – has exacerbated pressures.
We’ll be bringing you the latest market reaction and analysis throughout the day. For the latest updates in politics, head to our Westminster liveblog here.
