6:33 am, March 4, 2026
UK economy could face ‘very significant’ impact from Iran conflict – OBR
The UK economy could face a ‘very significant’ hit from the conflict in Iran, the official budget watchdog has warned.
The Office for Budget Responsibility (OBR) said that the outlook for inflation would be ‘particularly uncertain’ following spikes in gas and oil prices in recent days following attacks in the Middle East.
It came as the budget watchdog reduced its inflation forecast for this year, indicating that UK inflation will drop to target levels quicker than previously expected. It also cut its economic growth forecast for this year and revealed a worsening unemployment outlook for the next three years.
Reeves insists she has right plan despite economic growth forecast cut
The UK faces weaker economic growth and higher unemployment than previously expected but Rachel Reeves insisted she had the right plan and the country must ‘stay the course’.
The chancellor said her plan was ‘more necessary than ever before in a world of uncertainty’ with the Iran conflict threatening economic stability.
In a highly political spring statement – taking aim at Reform UK, the Green Party and with a warning to critics in her own party – Ms Reeves cautioned against any ‘change of course’.
Volvo to launch largest over-the-air update for its vehicles
Volvo will introduce one of its largest over-the-air updates for its cars, bringing a more intuitive user experience.
The update will be rolled out in around 2.5m Volvos in 85 countries, with models built from as early as 2020 receiving the changes.
It will enable drivers to make fewer taps on the infotainment system to reach the most-used features, while a refreshed navigation screen brings a more modern look.
The markets
The FTSE 100’s decline accelerated on Tuesday, alongside European peers, amid fears that soaring energy prices will reignite inflationary pressures and hamper economic growth.
The FTSE 100 index ended down 295.98 points, or 2.8%, at 10,484.13. The FTSE 250 ended down 729.43 points, 3.1%, at 22,694.21 and the AIM All-Share closed 29.46 points lower, 3.6%, at 786.43.
The pound was lower at 1.3305 dollars on Tuesday afternoon, from 1.3360 dollars at the equities close on Monday. The euro stood lower at 1.1585 dollars, from 1.1672 dollars. Against the yen, the dollar was trading slightly higher at 157.80 yen, compared with 157.73 yen.
UK to send warship after Cyprus base hit by drone
The UK will send helicopters with counter-drone capabilities and a warship to protect British military personnel in Cyprus, the prime minister has said as the Middle East war continues to spiral.
Sir Keir Starmer confirmed the UK will send HMS Dragon, one of the Royal Navy’s six Type 45 air defence destroyers, after RAF Akrotiri on Cyprus was hit by a drone.
Two Wildcat helicopters will join the vessel, equipped with Martlet missiles – which are designed to counter drone attacks.
Trump ‘not happy’ with UK over Iran and says Starmer is ‘not Winston Churchill’
Donald Trump has said he is ‘not happy’ with the UK after it did not initially allow the US to use its bases for strikes on Iran, and added that Sir Keir Starmer is ‘not Winston Churchill’.
It is the latest in a series of broadsides from the US president over the UK’s position on the Middle East war.
Sir Keir decided on Sunday that UK bases including the joint UK-US Diego Garcia site in the Chagos Islands and RAF Fairford in Gloucestershire could be used in the conflict, but only so the US can strike defensively to protect countries being targeted by Tehran. Trump has complained to newspapers that he was ‘very disappointed’ that the UK had not allowed the US to launch initial strikes from its bases.
Tuesday on Car Dealer
EV buyers still need ‘hand holding’ as Electrifying survey reveals continued challenges
EV buyers still need an element of ‘hand holding’ and the government needs to do more to level up the playing field across the country.
Volvo reveals top-performing dealers in annual Retailer of the Year awards
Volvo UK has revealed its top-performing dealers for 2025 at its prestigious annual awards ceremony.
Family-run dealer group W R Davies appoints new general manager for Nissan Rhyl
Dealer group W R Davies has appointed a new general manager for its Rhyl Nissan showroom.
Weather
Early fog and low cloud in England and Wales will clear to leave a dry and sunny day, reports BBC Weather. Northern Ireland and Scotland will stay breezy and mostly cloudy, with rain in west Scotland.
Tonight remains cloudy in the north with further rain, while southern areas stay dry with long clear spells.
