# Roundup of the week: 6 March 2026 _This week has been dominated by the outbreak of war in the Persian Gulf._ Neil Woodford · 6 March 2026 · 5 min read ![This week, the US Supreme Court ruled Trump's tariffs unlawful.](https://cdn.sanity.io/images/v3acfbvo/production/20cde5cac843081ff5f83d374f8c5ab737f989df-3840x2160.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)**.** Not surprisingly, this week has been dominated by the outbreak of war in the Persian Gulf. Although quite a lot of important economic data has been released this week and we have had a Spring Statement from the Chancellor, financial markets have paid little attention to these events and, not surprisingly, have been completely focused on the war unfolding in the Middle East. I will comment briefly below on what turned out to be a pretty uneventful speech in the House of Commons, and on the better-than-expected US data, but the rest of this curtailed update will focus on the war between Iran and the US and Israel. This week's Noise Cancelling podcast deals exclusively with the renewed outbreak of war in the region and the framework I have used to assess its implications for the global economy and for financial markets. I won't therefore repeat here what is discussed at length on the podcast other than to say that the easy, straight-line parallels the media is prone to draw between this conflict and those that took place in the region in 1973 and in 1979 are, I believe, wrong. My judgement is that this war will be short-lived and will not lead to the global energy price shocks that previous conflagrations in the region once did. Whilst war rages and whilst the Iranian regime lashes out at its Gulf neighbours, I expect financial markets to be nervous and volatile. Oil and gas prices have also risen significantly since last weekend, but interestingly, in the case of oil prices, are close to the levels reached in June last year when the US and Israel bombed Iran's nuclear infrastructure, and in the case of gas prices in Europe, although much higher than last week, are nowhere near the levels that followed Russia's invasion of Ukraine in 2022. (Those higher prices lasted until the start of 2024.) Whilst the Straits of Hormuz remain largely closed to shipping, this nervousness in energy markets will remain, but my expectation is that US military superiority in the air and at sea will mean that in the not too distant future, and well before global energy storage infrastructure is depleted, something approaching normality will return to these supply lines. Incidentally, this is as much in China's interest as it is in the West's, given that China is one of the biggest customers for Qatari LNG and oil exports from the region along with India, Taiwan, South Korea and Pakistan. Interestingly, as I write I am reading a story on Bloomberg that the UAE government has stated that residents in Dubai can resume normal activities. This might be premature given that Iran is still attacking oil and gas infrastructure across the Gulf region, but it is nevertheless a sign of the mismatch between reality on the ground and some of the news stories in the western media. ## Chancellor's Spring Statement This economic non-event was much more about politics than it was about fiscal policy. In a pretty clumsy performance in the House of Commons, Rachel Reeves claimed that the government's plan was working in an uncertain world. Unfortunately, my sense is that this claim is false, first because there is scant evidence that there is a plan, and certainly not one that will lead to better growth outcomes for the UK economy, and secondly, there is clearly no evidence that the mystical plan is working. Indeed, in the speech the Chancellor revealed that the OBR had downgraded its growth forecast for the economy in 2026 to 1.1% from its previous 1.4%. Despite this, the OBR now estimates that the budget deficit in this financial year is expected to be £5bn lower than its November estimate, at £133bn, reflecting the undeniable central outcome of this government's mystical plan, which appears to be to raise taxes to levels not seen in the UK since the 1970s. In fact, based on the already known increases in tax that will follow the non-indexation of allowances, tax receipts as a share of GDP will in fiscal year 2029/30 go above 42%, which was the peak in this ratio right at the end of the 1960s. Despite this gormless philosophy that appears to be the central plank of the government's economic strategy, namely that it can tax the economy to prosperity, I remain more upbeat than the OBR and the Bank of England. Based on the view that the economic impact of the war in the Persian Gulf will be limited, I still believe that the economy will outperform the gloomy prognostications of the OBR and the Bank and deliver growth closer to 1.5–2% in 2026. This better outcome is based on the view that lower inflation and interest rates will lead to lower saving and more spending in the household sector. I am also more positive on the outlook for business investment as well. ## US Economic Data Part of the resilience of the US equity market this week was attributed to the better-than-expected macro data that was released on Wednesday. Amongst the highlights was the ISM services index which rose to its highest level since 2022 and the payrolls data which showed the strongest level of job growth since last summer. Some analysts in the US estimate that this data is consistent with GDP growth of 3% in 2026, much higher than consensus estimates which are anchored to the 2% level, albeit still distant from the naturally optimistic Trump administration's claim that growth will exceed 4%. Clearly these data reflect activity in the economy before the conflict with the Iranian regime kicked off last weekend but nevertheless indicate better-than-expected underlying momentum in the economy than the consensus expected. ## What to Look Out for Next Week I suspect, not surprisingly, that the dominant theme in geopolitics and financial markets will be the war in the Middle East. By this time next week, I expect that there will be more clarity about the ability of the regime in Iran to continue to wage war and there may also be a clearer picture about what type of new leadership will emerge in the country and whether that new leadership will be prepared to negotiate with the US. Both of these issues will be very important in the context of the war's duration, as indeed will be any attempts to open the Straits of Hormuz to shipping. There is a busy economic diary next week as usual, including inflation data from China, labour market data from the US and January's GDP data from the UK. There are also a lot of results next week, especially from listed UK companies.