WeekWatch - 15/06/2026

US-Iran framework agreed - and SpaceX soars

The US and Iran have agreed on a framework peace agreement, announced late on Sunday and due to be signed later this week. The memorandum of understanding, which sent markets soaring on Monday morning, should see the immediate toll-free opening of the Strait of Hormuz.

Oil prices fell nearly 4% in early Asian trading, while equity markets jumped. 

While the ceasefire news has cheered investors, some uncertainty remains. In some ways, it marks a new phase of negotiations, as the deal now gives the two sides time to haggle on the ‘finer’ points of the deal (including around Iran’s nuclear stockpile). There are also questions about the damage already done to regional infrastructure.  

For president Trump, the importance of getting fuel flowing through the Strait again was emphasised by US inflation figures released last week. These revealed that prices rose 4.2% compared to 12 months earlier, their fastest pace in three years. Higher energy costs were the primary cause of the inflation, with oil and gas prices still elevated due to the conflict with Iran. 

Core inflation, which strips out the effects of price rises for energy and food, rose by 2.9% compared with last year. Markets reacted to the inflation news by selling off, although some of this may have been disguised by the current volatility in tech stocks. The non-tech Dow Jones industrial as well as the tech-heavy Nasdaq both fell almost 2%. 

After several months of disruption, it is likely the impact of the conflict will continue to be felt in the coming months. For example, it will still impact core inflation as the damage already done works its way through the system. But these effects should now be more limited.  

With a Federal Reserve meeting due later this week to discuss interest rates, Hetal Mehta, Chief Economist at SJP, notes: “This deal comes in the nick of time for new Fed chair Kevin Walsh. No doubt the Fed was set to pivot to a slightly more hawkish stance this week, but it can now take some solace and not talk quite as hawkishly about the oil situation if the shock now looks to be more comfortably temporary.” 

To the moon (and Mars) 

While the Iran deal will likely dominate headlines over the coming days, last week the big story was the record-breaking initial public offering (IPO) of Elon Musk’s SpaceX. 

The IPO shattered previous records. Shares opened at $150 on Friday, rising to $160 by the end of the day, valuing the company at over $2 trillion. This leaves the company as one of the largest in the world by market cap, above giants like Saudi Aramco, Meta, and Musk’s other business, Tesla. 

This had a knock-on effect for the rest of the market, as investors sold off other shares to make room in portfolios for SpaceX. 

Its value is a sign that investors have faith that the company will meet at least some of its ambitious targets. These include putting data centres in orbit and people on Mars. As a loss-making business, investors will be hoping these will help it report profits to justify such lofty prices. Regardless, the news on Friday meant that Elon Musk became the world’s first trillionaire.  

SpaceX won’t be the only IPO game in town for long. AI giants Anthropic and OpenAI are due to list later this year. Both are likely to receive valuations in the hundreds of billions, as things stand.

UK economy shrinks in April 

While North America celebrates the ceasefire deal and the SpaceX IPO, the UK is contending with ongoing economic weakness. 

Figures from the Office for National Statistics show GDP fell 0.1% in April – though this number was widely expected, following strong growth in 
February and March. 

Since Covid, the UK has generally performed better in the first quarter than later in the year. This year the difference is likely to be compounded by the higher energy costs that only really started to bite in the final weeks of March. 

Despite this weak domestic backdrop, UK investors instead seemed to focus on the improving global sentiment and falling energy prices. As a result, the FTSE 100 finished the week in positive territory after a strong second half to the week.  

Later this week, the Bank of England (BoE) will meet to discuss interest rates. The ceasefire news reduces the chances of a rate hike for now. However, given the ongoing uncertainty, a hike later this year can’t be ruled out.

Eurozone interest rates rise 

On inflation, the European Central Bank (ECB) has taken a proactive stance. Last week it chose to raise interest rates. 

The bank is facing the competing conflicts of inflationary pressures and weak growth. Lifting interest rates favours the former but can exacerbate the latter. The decision was unanimous by decision makers in the bank, though it did note that it was not “pre-committing to any particular rate path” for the future.  

Global affairs are currently still uncertain. Until the Iran-US peace deal is finalised and signed, it is likely decision makers in both the BoE and the ECB will be spending more time following events there than their respective teams in the World Cup.  

Mortgage lending rules could help more self-employed and older borrowers

The Financial Conduct Authority (FCA) has published a consultation into its proposed mortgage rule changes. It would give lenders greater flexibility to lend to certain groups of borrowers.

Under the proposed changes, the rules would widen the scope for lending to the self-employed, older borrowers, first-time buyers and workers paid in a foreign currency. These borrowers often struggle to secure a mortgage due to strict lending criteria.

The consultation proposes greater flexibility for lenders when assessing the individual circumstances of the borrower. Lenders would be able to consider a borrower’s ‘full and current’ financial picture, rather than being forced to reject an application due to a borrower having an irregular income, for example. 

Lenders could also develop products that better meet borrowers’ needs. This could include offering flexible repayments for example, while still providing robust protection for borrowers to ensure a loan is affordable.

Other key proposals include:

• Relaxing the rules for older homeowners when unlocking wealth built up in their property. The Financial Conduct Authority intends to update its affordability guidance for retirement interest-only mortgages.
• Updating the rules on interest-only (or part interest-only) mortgages to give lenders more flexibility. Borrowers will still need to show a clear repayment plan, as the amount borrowed doesn’t decrease but remains the same with an interest-only loan.

Government proposes rule changes to boost financial security for cohabiting couples

The government has announced a series of proposed reforms that could bring unmarried, cohabiting couples more closely in line with their married counterparts.

The plans include allowing eligible cohabiting partners to inherit in the same way as a spouse or civil partner, both in terms of entitlement and their position in the order of succession.

The proposals also set out new rights for unmarried couples who separate, giving them similar legal protections to divorcing couples, provided they have lived together for at least three years.

Your home may be repossessed if you do not keep up repayments on your mortgage.