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The Beach IFA Monday Espresso is your essential five-minute investment briefing, equipping you with everything you need to know for the week ahead. Marlborough's Multi-Asset Solutions Investment Team summarise market events over the past seven days and preview the key events in the week ahead, while also sharing their expert insights.
Monday Espresso Podcast - 16th March 2026
[00:00:00] Andrew Shaw: Hello, and welcome. It's Monday, March 16th. I'm Andrew Shaw Investment Analyst at Marlborough. Our goal, as always, is to give you your weekly shots of market news. Joining me today is someone who spends his days navigating the complexities of debt markets. James Athey, our Fixed Income Portfolio Manager.
[00:00:19] Andrew Shaw: James, thank you very much for joining me.
[00:00:21] James Athey: Hey Andrew, my pleasure as always.
[00:00:24] Andrew Shaw: Brilliant. Today we're gonna have a look at three main topics, the Middle East, the US inflation numbers, and the UK economy. So let's dive right in. James, let's start with the biggest story. The conflict in the Middle East has entered its second week, we've seen oil prices spike up to $120 and back down again, and yet, surprisingly, the US stock market seems to be holding up much better than Europe and Asia. What's the logic there?
[00:00:49] James Athey: Yeah, it's obviously a very fluid, very complicated situation, and it is abundantly clear that investors are struggling to price any outcome with any degree of confidence.
[00:01:06] James Athey: It's not clear exactly from the US side what the goals of the military intervention are. It's therefore doubly unclear how long the conflict will last. And ultimately what's most important for markets is the effect having on energy markets.
[00:01:22] James Athey: So oil of course, but also gas. The region is a huge exporter of LNG, liquid natural gas and that is a big issue for Europe and the UK as we found out in the aftermath of the Russia invasion of Ukraine in 2022.
[00:01:41] James Athey: So first of all, you mentioned US stock markets. They've definitely been more robust. Why is that? Well, the simple reason is that the US is itself an oil producer and therefore there is some significant offset in terms of the economic damage from higher oil prices.
[00:01:58] James Athey: It also is somewhat separate from the LNG coming out of the Middle East. It produces its own gas and it has actually its own reference price for gas, and so it doesn't suffer as much when the price of wholesale gas going to Europe and the UK spikes as it has done in recent days. So the US is deemed to be less negatively affected than the big energy importing countries and regions,
predominantly Europe, Japan, the UK, and to a lesser degree China.
[00:02:31] Andrew Shaw: Thank you very much for that, James. The strait of Hormuz keeps coming up. How significant a short point is it really? And what do we think a prolonged closure will actually mean for markets?
[00:02:42] James Athey: Yeah, that is the big question. That is the big issue. How significant a choke point is it? The short answer is very.
[00:02:50] James Athey: In total, the world consumes around 105 million barrels per day of oil, around 20 million barrels per day of oil transit through the straits of Hormuz. So roughly speaking, that's 20% of global supply. Most of that is destined for Asia, specifically China. But of course the ripple effects in terms of that much supply disruption are potentially huge. We really are talking about an energy shock that's larger than anything that we've had to deal with in recent years. And what's making this situation potentially even more disruptive is that the longer this supply disruption goes on, the more storage is used. Because the oil cannot find its way out of the region.
[00:03:41] James Athey: And when storage gets full, you start to see major oil producers actually shutting down or shutting in as it's often called production. And the problem there is that once you have shut down production. It is not quick or easy to restart it. And so then investors have to consider a much longer time horizon over which we could see disruption and of course a massive increase in prices as we've seen already.
[00:04:08] Andrew Shaw: Interesting. Thank you very much for that. We got US consumer price index data or CPI data last week. It stayed steady at 2.4%. For our listeners who may not be tracking every decimal point, is this a sign of progress or warning light?
[00:04:23] James Athey: Realistically, we didn't learn a lot from this most recent data, as you said, it was unchanged relative to the prior print.
[00:04:32] James Athey: When you take a step back and look at inflation data in the US and indeed in most countries over the last 12 or 18 months, what we see is steady progress back towards the 2% area that most central banks target, but certainly slow progress. And I think that's where some central bankers and some investors have been concerned or frustrated that progress has not been quick enough and of course, unchanged from one month to the next suggest again, a sort of lack of progress.
[00:05:03] James Athey: The reality, of course, is that to a significant degree this is old news now, three or four weeks ago, before the situation in Iran erupted, this would've been probably the second most important data point in the US. The fact of the matter now is that what happened last month seems very, very irrelevant when we've got such huge shock ongoing at the moment that will definitely push up
inflation because of the impact on oil prices.
[00:05:30] Andrew Shaw: That's interesting. Thank you, James. Turning to domestic front, the ONS released January GDP figures on Friday, and it wasn't exactly an optimistic picture. It was zero growth in January. So James, why is the UK struggling to find any momentum and what do you think the MPC does this week?
[00:05:47] James Athey: Honestly, trying to answer that question about UK growth would take a lot more time than we have on a sort of five to 10 minute podcast. Unfortunately there have been a number of shocks that have hit the UK economy over recent years. Things have not really been helped, I have to say, by policy decisions being made by the government since they were elected, you know, a year or so ago, we've certainly seen increases in tax burdens, particularly towards employment, which seems to be having a pretty deleterious effect on hiring decisions.
[00:06:22] James Athey: So we see job growth slowing unemployment rising. That will definitely be a big part of this but ultimately, I think the problems are greater than just simply decisions that have been taken by the UK government, but certainly there is nothing really encouraging in the data that we saw at the back end of last week.
[00:06:39] James Athey: Zero growth once again suggests really a UK economy, which is stagnating. So what does this mean for the Bank of England? Well this is, you know, the biggest question now because of what's happening in Iran, because of the effect it having on the oil price. From our perspective for the
Bank of England to even countenance rate hikes at this juncture would be ill-advised to say the least.
[00:07:03] James Athey: The oil price is not something that monetary policy can affect and simply heaping more misery on UK consumers by raising interest rates in order to try and prevent inflation expectations getting out of control at a time where the jobs market is so weak and therefore it's unlikely that we will see really hot wage growth would not be helpful at all, and I think could end up being very damaging.
[00:07:28] James Athey: So it's probably a lot less likely that we see an interest rate cut from the bank this week. Maybe that could have happened if the Iran situation hadn't arisen. Probably it was more likely in April anyway. But I think what we'll see from the bank is caution with respect to future cuts for now while they assess the ongoing impact of what's happening in Iran.
[00:07:49] Andrew Shaw: Brilliant. Thank you very much for that as well. James, before we wrap up, let's look at the economic calendar. This week is a massive one for Central Banks. On Wednesday, we've got the US Federal Reserve meeting. On Thursday it's a double header with the ECB or the European Central Bank and the Bank of England both have meetings. We've also got Bank of Canada interest rate decision along with the Royal Bank of Australia interest rate decision. So, and just to round that off, we've also got the Bank of Japan interest rate decision on Thursday as well. So a big week for Central Banks. James, thank you very much for joining me this week.
[00:08:23] Andrew Shaw: It's been a pleasure.
[00:08:24] James Athey: Pleasure as always, Andrew.
[00:08:25] Andrew Shaw: Thank you very much. That's it for this week's Monday Espresso podcast.