From Brent to the Boardroom | The MJBurrows Briefing - Issue No 24

From Brent to the Boardroom

This week, I traced the Iran war's invoice through the British economy. UK Set for £35bn Iran War Hit unpacked NIESR's verdict that even the benign scenario kills Reeves' tax plans. Brent Oil Hits $126 walked the supply shock from the Strait of Hormuz to the UK forecourt. UK Borrowing Costs Soar to 2008 Highs explained why the bond vigilantes came for Britain first, with gilt yields at their joint-highest since the 2008 crisis. Gold's Weird War caught the strangest tell of all: the classic crisis hedge, down 11% during an actual war. And Taylor Wimpey Joins the Pullback marked the third major housebuilder in a month to retreat from land, calling the 1.5m homes target dead in the process.

On the corporate desk, the calls were sharper. NatWest Q1 Profit Beats £2bn asked why a clean beat sent the stock down 4%. Whitbread Cuts 4,000 Jobs in £2bn Pivot showed why Britain's biggest hotelier no longer wants to own its own buildings — the post-Budget squeeze in one decision. Aston Martin's £66m Loss Hides a 26% UK Sales Crash flagged the number every other headline missed. Shell Bets $16.4bn on Canadian Shale called time on Big Oil's green pivot. And the one I had most fun writing, CMC Markets Drops £30m on Everton, told the story of how a London broker just outbid football's old money for one of the most-watched billboards in world sport.

Welcome back to the briefing.

Imagine the Chancellor’s morning briefing today. NIESR — Britain’s oldest economics think tank — has just told the Treasury that the Iran war will knock at least £35bn off UK GDP, cut growth to 0.9% this year, and force the Bank of England to start hiking again as early as July. The damning bit isn’t the worst-case scenario. It’s that even the “benign” one — where the Middle East conflict resolves in days — leaves Rachel Reeves’ tax and spending plans labelled untenable. The fiscal headroom she had in March has, on NIESR’s own central case, already evaporated.

Forget Brexit, forget rate cuts, forget every other macro headline grabbing attention — there’s a quieter tax fight brewing today that may matter more for British investment than any of them.

5 per cent. That’s the 10-year gilt yield this morning — joint-highest level since the 2008 financial crisis, and only the third time it has cleared that line since the Iran war broke out.

Picture every Labour MP and Green Party campaigner who’s spent the last two years insisting “tax the wealthy” is the obvious answer to the UK’s fiscal hole. Now picture six years of Institute for Fiscal Studies research telling them the answer isn’t actually that obvious — and may not even work.

News doesn’t take weekends off, neither should your portfolio. What about when the S&P moves 3% during your commute?

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NatWest (LON: NWG) printed a £2bn quarterly profit. Margin climbed 20bps to 2.47%. Income guidance was raised. By any operational measure, this was a beat. The stock fell 4% to 563p anyway. Underneath the headline sits a £2.7bn Evelyn Partners deal and a Coutts deposit threshold lifted overnight from £1m to £3m. Here is what the share-price reaction is really telling you.

Wars are supposed to be good for gold. The narrative is older than the modern dollar: bombs fly, oil spikes, smart money runs to bullion, gold rallies. Except this time, gold isn’t reading the script. Two months into the Iran-US war, with the Strait of Hormuz blocked and energy prices surging, spot gold sits near $4,697 an ounce — down roughly 11% since the conflict began at the end of February. The “crisis hedge” story everyone has invoked since 1971 just broke in front of our eyes. Here’s what’s actually moving the price, the deal Iran just put on the table, and what this week’s central bank decisions could do to the trade.

Morgan Stanley (NYSE: MS) joining the US spot Bitcoin ETF party this month had crypto Twitter calling the bottom. Wall Street’s $8 trillion (~£5.9tn) advisory machine, finally pointed at BTC. Bear market over. Adam Back, Blockstream CEO and Bitcoin OG, says the calendar is wrong. Flows are coming in quarters not weeks. BlackRock (NYSE: BLK) recommends 2-4% allocation; most fund managers haven’t executed yet. That lag is where almost everyone is mispricing this cycle.