14 April 2026: Reeves hails mini nuclear deal as UK seeks energy security amid global turmoil

The Bank of England has published updated operational guidance on how it would manage the failure of a UK bank or building society, setting out clearer processes and introducing a new approach to reduce legal friction when creditors hold US-issued securities.

The resolution regime is designed to allow a firm to fail without interrupting critical functions such as payments and access to deposits, and without calling on public money. The Bank said the updated material is intended to improve transparency and ensure that firms plan for stress, thereby supporting financial stability and confidence in the banking system.

One guide addresses transfer resolution, under which all or part of a failing firm could be moved to a private-sector buyer or into a temporary bridge bank owned by the Bank. The guide also describes circumstances in which the Bank might require a recapitalisation payment as part of a transfer. The updated text expands on how the Bank would use its powers to execute sales in the event of a failure.

The Chancellor, Rachel Reeves, has said that a deal to accelerate Britain’s first fleet of mini nuclear reactors is “more important than ever”, as global energy markets remain under pressure from instability in the Middle East.

The agreement, announced by state-owned Great British Energy Nuclear, will allow work to begin immediately on three small modular reactors (SMRs) developed in partnership with Rolls-Royce’s engineering arm.

The reactors are designed to be built in factory-made sections and assembled on site, in theory allowing faster construction than traditional large-scale nuclear projects such as Hinkley Point C.

Reeves said the programme marked a key step towards reducing Britain’s reliance on volatile fossil fuel markets, arguing that the recent surge in global energy prices underlined the need for greater domestic energy security. The timing of the announcement was highly topical, given the recent volatility in global energy markets due to the conflict in the Middle East.

Reeves said: “In the context we find ourselves in today, it shows how important a contract like this, technology like this, is.”

Sir Keir Starmer has demanded that Donald Trump end his blockade of the Strait of Hormuz, which is set to cause economic pain for Britons as petrol prices soar.

Yesterday morning, the Prime Minister had already announced that “we are not supporting the blockade” and that the UK is “not getting dragged in” the war in Iran.

But Sir Keir then announced that he was bringing 40 nations together to force the reopening of the Strait, which Iran had initially blockaded. He demanded a reversal of the White House’s policy.

In all probability, Trump will ignore the demand for two reasons: first, the U.S. President has become a megalomaniacal figure who seeks the advice of no one, and second, Starmer, while he has a certain level of influence, remains on the periphery of the process.

The “bringing together” shows that Starmer desperately wants a seat at the top table that Trump and Brexit have denied him.

The Prime Minister seems determined to reverse several parts of the Brexit agreement. This was not part of Labour’s election manifesto and represents a major policy change. It is an admission that Labour's economic policies are not working and demand significant change, according to several observers.

It is understood that Starmer intends to avoid a Parliamentary debate by using existing legislation to enable a return to the EU’s trade regulations and the customs union.

The PM has been accused of a "direct Brexit betrayal" after Labour’s plan emerged.

Ministers are set to introduce legislation to align the UK with future Brussels-derived regulations without normal parliamentary scrutiny. Last night, Brexiteers warned the Prime Minister would be making a manifesto-breaking move by making the UK a "rule-taker" on directives created in Brussels.

Reform UK leader Nigel Farage warned that the move was a "backdoor attempt to drag Britain back under EU control."

Mr Farage added: "Accepting their rules without a vote is a direct betrayal of the Brexit referendum and a total breach of the Government's manifesto promises."

The pound is receiving mixed signals from the market, giving traders “headline overload”, with the failure of talks in Islamabad at the weekend being followed by Trump’s announcement of a blockade of the Strait of Hormuz, the effect on oil prices and therefore the pound has been impossible to interpret.

Yesterday, Sterling rallied to a high of 1.3508 and closed at 1.3505. It was the first time the 1.35 level had been broken since late before the conflict began.

The US housing market is struggling as the impact of higher mortgage rates, fuelled by the US-Israeli war in Iran, begins to bite.

Figures from the National Association of Realtors showed that the number of homes sold in March hit a nine-month low.

Average rates for a typical 30-year fixed deal stood at 6.37% last week, up from 5.98% before strikes on Iran began in February. This is significant since, in the U.S., 30-year loans are readily available, whereas in the UK, banks are limited in the loan terms they can offer.

"Some buyers feel frozen; they don't know how to make their decisions because events like the ones we're talking about spring up so rapidly and are so out of our control, according to real estate agents.

NAR recorded 3.98 million existing home sales in the US in March, the lowest number since June. The figures largely reflect sales agreed before the war broke out, but they also show the market was under strain before strikes began.

Analysts had expected 2026 to mark a recovery for the housing market, following a drop in mortgage rates.

But, following drops in January and February, rates have shot up since the US-Israeli war began. They are rising on expectations that the US central bank could continue to hold interest rates to keep inflation under control, dashing hopes of further cuts by the Federal Reserve.

Indicators point to "weakening housing demand following a recent jump in mortgage rates and a collapse in consumer confidence", said Thomas Ryan, North America economist at Capital Economics.

Chicago Federal Reserve President Austan Goolsbee said yesterday that oil futures markets are pricing in the expectation that the surge in oil prices related to the Iran War will be short-lived, and that, as long as this is the case, the impact on the U.S. economy may be limited.

"As long as the consumer remains strong, I think the economic growth is going to remain strong," Goolsbee said in an interview on Fox News. "If this were extended, if the price of gasoline were to remain at these kinds of high levels or higher for a longer period, then we would have to reevaluate what that means for consumer spending; but if it goes as the market thinks it's going to go, then it would be transitory."

The use of the word transitory evokes memories of Jerome Powell’s statement about inflation post-COVID.

Kevin Warsh’s confirmation as the next chair of the Federal Reserve is at risk of being delayed until after the end of Jay Powell’s term, as Donald Trump’s pick to lead the Central Bank faces an increasingly tight timeline.

With only one month to go until Powell’s second term as chair ends, the influential Senate Banking Committee has still not scheduled a confirmation hearing for Warsh. The panel has also not received Warsh’s financial disclosure documents or his answers to a questionnaire, which are normally delivered to lawmakers ahead of a confirmation hearing.

Warsh had expected a confirmation hearing to take place next week, but the anticipated grilling by senators is now expected no earlier than April.

The dollar index fell again yesterday as risk appetite grew, although the U.S. Navy's blockade of the Strait of Hormuz later in the day saw it pare its losses. It fell to a low of 98.36 and closed at 98.41.

Current energy prices remain close to the ECB's basic scenario and should not affect inflation and growth, the European Central Bank's incoming vice president, Boris Vujcic, said yesterday, according to television reports.

Vujcic said Europe's energy system is now more resilient to energy shocks stemming from conflicts in the Middle East than it was in 2022, when Russia invaded Ukraine, thanks to diversification of supply.

"We are not ‌in ⁠an unfavourable and even less so in a very unfavourable scenario, either concerning oil or ​gas," Vujcic ⁠told a financial forum in Croatia. "And that is good ​news."

Vujcic went on to say that the energy shock remains of low intensity due to the two-week ceasefire in the U.S.-Iran war, but the market may be hit if the war escalates again.

However, ECB President Christine Lagarde said a “not-too-persistent” rise in inflation could trigger a hike after the bank was forced to upgrade expectations for euro zone inflation, which are now forecast to rise above the 2% target.

“To leave such an overshoot entirely unaddressed could pose a communication risk: the public may find it difficult to understand a reaction function that does not react,” she added, without giving a timeline or criteria for when the central bank might deem an interest rate hike necessary.

Germany’s economy lost momentum in the first quarter as the Middle East conflict weighed on activity, the Economy and Energy Ministry said yesterday.

In a report, the Ministry said an initial partial recovery at the start of the year has given way to stagnation and uncertainty.

It cited rising prices, weak demand, supply bottlenecks, higher energy and raw material costs, and persistent uncertainty as factors behind declines in industrial and consumer indicators.

The Ministry added that any recovery will depend on resolving the crisis, but warned that high prices are likely to persist even if a ceasefire holds.

Businesses are facing pressure from supply chain disruptions and surging input costs, the report said.

Analysts added that weak industrial activity and adverse weather in the construction sector significantly limited growth in the first quarter.

Meanwhile, German Chancellor Friedrich Merz has warned that the war in Iran will have lasting consequences for the global economy, with Germany preparing to bear a significant and prolonged burden on its own economy.

“We will feel the consequences of this war for a long time to come, even after it is over,” Merz said at a press conference in Berlin yesterday.

“Consequently, we are also preparing for a significant burden on the German economy for an extended period, and thus a considerable burden on private households as well.”

The conservative leader expressed regret over the end of US-Iran talks in Islamabad without an agreement, while noting he had anticipated difficulties from the outset.

“I wasn’t surprised by the decision to break off the talks in Islamabad. From the very beginning, I didn’t get the impression that they were really well prepared,” he told reporters, adding that reaching a diplomatic solution would be a lengthy process. Process.

The Euro is being buffeted by shifts in risk appetite, a factor across all financial markets currently. It is impossible to judge what will happen next, but as long as the ceasefire holds and talks are not cancelled, just postponed, markets will remain confident that a solution will be found.

Yesterday, the common currency rallied to a high of 1.1765 and closed at 1.1758.

Have a great day!