The Strait of Hormuz situation has escalated sharply. The US launched a fresh wave of strikes against Iranian sites overnight, and Iran has responded by targeting Bahrain and Kuwait. More immediately for markets, Washington has revoked the sanctions waiver it granted in June that had allowed Iran to produce and sell crude through to August. Three tankers were struck in the Strait before the waiver was pulled. Oil supply risk is back on the table in a way it wasn’t last week, and the Hormuz chokepoint is live again. NATO’s secretary-general Rutte has backed the US action as “absolutely necessary.”

On the geopolitical framing, Khamenei’s funeral procession is heading to Iraq, with Tehran using the occasion to project influence across Shia holy cities. Iran’s industrial base is described by analysts as taking damage that could take years to reverse across two wars in a year. The combination of physical destruction and renewed sanctions is a meaningful tightening of the supply picture.

Marine Le Pen has confirmed she will stand in next year’s French presidential election despite the Paris court of appeal upholding her embezzlement conviction. The legal position is complicated — French law does not automatically bar a convicted candidate from standing — but this sets up a campaign in genuinely unprecedented territory. A Le Pen presidency would reshape French foreign policy, EU budget dynamics, and the Franco-German axis at a moment when Europe is already under fiscal strain. Worth watching how French OAT spreads move on this.

The NATO summit in Ankara has produced a £37bn commitment from allies to a new missile programme, with Starmer convening around a dozen leaders on the project. The headline number matters less than the signal: European defence spending commitments are hardening into actual procurement.

On UK domestic politics, Farage has resigned his Clacton seat to trigger a by-election he is framing as “the people versus the establishment.” Every other main party has said it will not stand, calling it a stunt. The £5m undeclared gift from a crypto billionaire has been reported to the National Crime Agency over money laundering concerns. He is almost certain to win the seat back, but the financial scrutiny is unlikely to dissipate and could constrain Reform’s broader credibility argument heading into the next electoral cycle.

The Economist flags that AI is beginning to move into credit risk assessment in bond markets, following its penetration of equity positioning. Worth tracking if you have fixed income exposure — the repricing dynamics when AI-driven models cluster on the same credit calls will be different from equities.

UK amber heat-health alerts are in effect with temperatures forecast to 36C, potentially the longest-lasting heatwave since 1976. Operationally relevant for any infrastructure, logistics, or utilities exposure.

The Bank of England’s chief economist Huw Pill speaks tomorrow.

Sources

Guardian, BBC News, TechCrunch, FT, Al Jazeera, Ars Technica, Politico, The Economist — 2026-07-08