# Roundup of the week: 13 March 2026

_The consensus has decided the Gulf war is catastrophic, but crowded consensus views are more often wrong than right — just ask anyone who predicted tariff-driven recession last year. UK GDP flatlined in January, the MPC should cut rates but probably won't, and next week brings a Fed decision and a UK rate call._

Neil Woodford · 13 March 2026 · 8 min read

![Roundup of the week: 13 March 2026](https://cdn.sanity.io/images/v3acfbvo/production/68f0b23b9dd57d26c87ae2e280709d1949a2b4d9-3248x1650.jpg?w=1600&fit=max&auto=format)

---

**If you think we have missed something you would like to discuss or would like to send in a question for next week's podcast episode,** [**send us an email**](mailto:hello@noisecancelling.co)**.**

This week the war in the Persian Gulf has continued to dominate the headlines and to completely preoccupy political and market dialogue. Good US inflation numbers this week received minimal attention, and I have yet to see any comment on the initial jobless claims data. Tomorrow's UK GDP numbers for January might attract some commentary, but I suspect good or bad, will be largely ignored. Financial markets and commentators on them seem unable to process anything other than the latest news from the war. In some respects, this should not be that surprising, but the inability of journalists and financial market commentators to properly contextualise the conflict, its likely duration and its medium and longer-term impacts on energy prices is odd. Maybe it is just another example of the consensus's predisposition to treat every geopolitical incident as existentially awful and to assume, as Private Fraser used to do, that we are all doomed.

In supporting a different narrative, I am not trivialising this war, or the horrors that came before it in Iran, but I am trying to arrive at an informed and logical conclusion about its duration and longer-term impacts on energy prices and the global economy. I recognise this is an opinion with which many are likely to disagree, but it is not a reflex view predicated on a one-eyed perspective of Donald Trump, or woolly notions of international law, but instead the product of an attempt at balanced analysis of this event, and many others I have witnessed over many years, some like it and others not at all.

By way of example, I was reminded this week of another significant geopolitical event, which, although not a war, had some parallels with what I see now following the outbreak of war in the Gulf. On this occasion, the consensus quickly formed a view that the event was extremely bad for the global economy, that it heralded a new sub-optimal era in which ongoing conflicts would undermine global trade growth, and lead to higher inflation and interest rates and lower economic growth. As you may have guessed, I am referring to Donald Trump's Liberation Day tariff announcements in April last year.

In the aftermath of the announcement, a consensus view quickly emerged that amongst other things, this announcement would catalyse a new and existential trade confrontation between the US and China, that it would reverse years of beneficial international trade growth, that it would trigger higher inflation everywhere and in turn lead to higher interest rates. Within seven weeks of the announcement the S&P 500 had fallen nearly 20% and across the world share prices cratered. I wrote at the time that the consensus view that the tariffs would catapult the US economy into recession were wrong as were the equally dire prognostications about their impacts on the UK economy which were especially prominent in the FT. Within a few weeks of the announcement, Lloyds Bank, for example, announced that because of new downside risks associated with the impact of Trump's tariffs it would be taking an additional £100mn impairment charge. It was not alone in completely misreading their impact.

Not to be left out, the Bank of England was quick to conclude that the tariffs were very bad news for the UK economy. Indeed, BoE officials warned that the tariffs posed "substantial risks to the UK economy" which could depress growth and create significant uncertainty. Just to ensure that they covered all the bases, the Bank acknowledged the inflationary pressures of the tariffs but then usefully added that they could also be deflationary because of the impact they would have on growth and demand. Helpfully, the OBR then added that the tariffs had created sufficient uncertainty that it warranted a halving of its growth forecast from 2% to 1%.

As I said at the time, I thought this was all wrong and that the impact of the tariffs would be minimal on the UK economy. I also said that the US economy would continue to grow and that I was confident that inflation would continue to fall through the year and that this would be accompanied by lower interest rates, not higher rates as so many were then forecasting.

I am not rehearsing these events merely to highlight what a clever dick I was, but to highlight how badly wrong the economic and market consensus was about the impact of Trump's tariffs. The initial announcement was indeed a negotiating tactic and nearly a year on the generalised US tariff rate is now 10% (with some exceptions) and in a few months even this rate might have to be withdrawn. As for their impact on the UK economy, I would suggest it is undetectable. For example, ONS data now shows that UK import prices rose 0.5% in 2025 — not much sign there of the inflationary impetus so many were expecting.

Not only did consensus get the economic impact of the tariffs wrong, it also misread the geopolitics too. At the end of this month Presidents Xi and Trump will be meeting face to face in China and that will be followed later in the year with a state visit by Xi to the US. I suspect that these meetings will seek to extend a period of relative calm on trade issues between the two superpowers, albeit that their economic confrontation will endure. As an aside, China's trade surplus grew by 21% in 2025 to $1.2trn — also not much sign there, despite a 20% fall in China's exports to the US, of the collapse in global trade growth so many were confidently predicting just under a year ago.

Having highlighted this very recent example of the consensus leaping to an extremely gloomy interpretation of a significant geopolitical event and getting it completely wrong, I am not saying that by definition it must also be wrong about the war in the Gulf. However, I am saying that crowded consensus views are more often wrong than right, and there is a very crowded consensus already on this war.

For the record, my analysis (I am not an expert) is that this war is going to be short, likely weeks rather than months. My sense is that although the US's war aims are not crystal clear, the immediate ambition is to completely suppress the Iranian regime's ability to enrich uranium to a weapons-grade level, to destroy its ballistic missile and drone capability and to very significantly erode its general offensive military capability. Whether in the process the regime appoints a leader that will take Iran down a different path remains to be seen, but right now that looks highly unlikely. For those reasons I suspect we will confront a relatively short period of additional military action that will be aimed at further undermining Iran's ability to retaliate, to strike its neighbours in the region and shipping travelling through the Straits of Hormuz. Maybe the best guide to progress on this front might be the following:

Some of these points and related topics are covered in this week's Noise Cancelling podcast and so I won't repeat them here. In closing though, my view remains that this conflict will be contained and its aftermath, especially in relation to energy prices, will not repeat what happened in 1973 and 1979.

## UK GDP

This morning the ONS released January's GDP data. Once again, the preliminary data is disappointing, showing that the economy flatlined in January (0.2% growth was the consensus expectation). Given that this period predated the increasing tension that briefly preceded the start of the conflict in the Persian Gulf, it is an especially disappointing number. Quite how the Chancellor and the government can credibly continue to claim that their plan is working is beyond me. Labour's policy of significantly raising taxation to fund an increasingly bloated and inefficient state is no way to deliver prosperity and growth. Indeed, it is always the case that this policy mix harms growth wherever it has been tried. What adds to my frustration and to the harm being inflicted on the economy is the fact that if taxation is increasing to unprecedented levels as it is, interest rates must be lower to compensate for the additional constraints being placed on the private sector. Bizarrely, the MPC fails to recognise this obvious and fundamental fact and has, in my opinion, failed to cut rates as quickly as it should have done.

Over the last year rates have fallen but the pace of the decline has been held back by poor judgements by the MPC which has misread the inflationary impacts of Trump's tariffs, misread the decline in wage growth, and been obsessed with unmeasurable concepts like inflation expectations, the output gap and spare capacity. All these concepts along with measures of productivity rely upon accurate labour market data, something which the ONS is clearly having huge problems providing. What is clear is that for some time the ONS has been overstating the number of people in work through the Labour Force Survey which has in turn rendered judgements based on this critical input, by definition, to be flawed.

Next week the MPC meets again and will be deciding what to do with interest rates. The consensus view is that they will not cut given the uncertainties surrounding the conflict in the Middle East and its impact on energy price inflation. Some high-profile commentators and investment banks are even suggesting that rates will now have to increase. For all the reasons above I think this is the wrong call. Given the underlying weakness in the economy and the fact that inflation is continuing to fall — to close to 2% in April given what we know is happening to the energy price cap and because of base effects — I think the Committee should cut. Having said that, given their track record, they will probably do nothing.

For the record, each $10 increase in the oil price increases petrol prices by 6–7p per litre which in turn adds about 0.1% to CPI. So far, petrol prices have increased from about 132p to 140p and given where oil prices are now, they will probably increase to 145–150p. This will boost inflation by about 0.25% over the balance of March and April but CPI should still fall significantly in April to close to 2.25%. Why rates need to be held at 3.75% given this outlook and a flatlining economy in January is a question the MPC should be asking itself.

## What to look out for next week

Once again, the financial markets' attention will be focused on events in the Middle East. Whilst that unfolds the economic diary is full with US inflation data followed by a Fed interest rate decision and more labour market data. In the UK we will also have unemployment numbers and on Thursday an interest rate decision. This macro data will also be accompanied by another busy week of company results, especially from the UK. There will also be some important results from some high-profile tech companies in China.