The OECD has issued a formal warning about a “dark scenario” if the Gulf energy crisis continues, projecting growth rates falling to levels last seen during Covid. The context matters here: the US and Iran exchanged fire overnight, with Centcom confirming Tehran launched ballistic missiles at Kuwait and Bahrain. Kuwait says its international airport was struck by Iranian drones and one person has been killed. This is a meaningful escalation from what had been a stalled diplomatic track, and energy markets will be pricing the tail risk this morning.

The OECD warning and the overnight strikes are effectively the same story. Watch Brent carefully at the open.

On the domestic front, Starmer faces PMQs this afternoon against a difficult backdrop. Disorder broke out in Southampton following the release of body-worn footage related to the Henry Nowak murder, with 11 officers injured. Reform’s Zia Yusuf has used the footage to press the two-tier policing argument publicly this morning. It is the kind of story that scrambles the political weather quickly — Starmer will need a clean answer on both the policing conduct question and the disorder itself.

At Microsoft Build, the company announced Project Solara, an Android OS designed around agents rather than apps, alongside Linux tooling and an RTX Spark desktop aimed at developers. Taken together the announcements signal Microsoft is repositioning Windows as an agentic platform rather than an app-delivery layer — a structural bet that has implications for enterprise software vendors whose distribution currently runs through the app model.

The FT has a piece on Alexandr Wang’s work inside Meta on the Muse Spark model. The framing is that Wang has restored some momentum but the gap to frontier rivals remains contested. Worth watching given Meta’s AI capex commitments and how the market has been pricing that spend.

The Economist flags that America’s Social Security trust fund has roughly six years of runway before legislators are forced to act. Not an immediate market mover, but relevant to anyone thinking about long-duration US fiscal positioning.

The Bank of England’s chief economist Huw Pill speaks tomorrow. Given the recent stickiness in UK services inflation, any signal on the pace of cuts will move gilts.

Sources

Guardian, Al Jazeera, BBC News, Ars Technica, TechCrunch, The Economist, Politico, FT — 2026-06-03