Business

Britain’s manufacturing sector has begun 2026 on a fragile footing, with factories reporting a sharp drop in domestic orders and a surge in operating costs that has forced companies to raise prices at the fastest rate in more than two years.

A new survey from industry body Make UK paints a concerning picture for the sector, warning that demand from UK customers has “collapsed” in the first quarter of the year while confidence among manufacturers has fallen for the third consecutive quarter.

The report highlights mounting pressures facing British factories, including rising energy costs, weak domestic demand and continued uncertainty in global markets. These challenges are now beginning to ripple through production plans, hiring decisions and investment strategies across the industry.

Manufacturers reported that UK orders fell sharply at the start of the year, undermining hopes of a strong rebound following the slowdown seen in late 2025. Although output showed modest improvement compared with the final quarter of last year, the recovery remains fragile and heavily dependent on external conditions.

Fhaheen Khan, senior economist at Make UK, said the sector is navigating a difficult mix of improving output alongside worsening cost pressures and weakening demand.

“While output and investment show some improvement after a challenging end to last year, rising costs and weakening domestic demand are creating real pressures for businesses,” he said. “The outlook for UK manufacturing remains precarious.”

The report also found that firms are increasingly passing higher costs on to customers. A net balance of 31 per cent of manufacturers said they had increased their prices in the first quarter, the highest level recorded since spring 2023.

Energy prices have been a major factor behind the increase in costs. Oil and gas markets have become increasingly volatile following the escalation of conflict in the Middle East, pushing up fuel prices and raising concerns about inflation across advanced economies.

The global benchmark for oil, Brent crude, surged to as high as $118 per barrel last week as tensions intensified in the Gulf and tanker traffic through the strategically important Strait of Hormuz was disrupted. Although prices have since eased, they remain significantly higher than the $60 to $70 range that prevailed before the conflict escalated.

By the end of official trading last week, Brent crude was still priced above $103 per barrel. Oil markets have swung dramatically in recent weeks as traders attempt to gauge the scale and duration of the conflict and whether energy shipments through the Gulf will resume at normal levels.

The shock to global energy markets has already begun to influence economic expectations in the UK. Investors who previously anticipated a series of interest rate cuts this year are now revising their forecasts, believing that higher energy costs could push inflation higher again.

The Bank of England is widely expected to leave its base rate unchanged at 3.75 per cent at its upcoming policy meeting, reversing earlier market expectations that borrowing costs might begin falling this spring.

Rising government borrowing costs also illustrate the shift in sentiment. The yield on the benchmark ten-year UK government bond has climbed to about 4.82 per cent, reflecting investors’ concerns that inflationary pressures may persist for longer than previously expected.

Manufacturers say the combination of weakening demand and rising costs is particularly concerning because it threatens both profitability and investment decisions. Recruitment across the sector has also fallen short of expectations, with many firms choosing to delay hiring as economic uncertainty intensifies.

Although manufacturing represents around 9 per cent of the UK’s gross domestic product, its importance to the wider economy is far greater. The sector accounts for roughly 34 per cent of the country’s exports and nearly half of total research and development spending.

As a result, weakness in manufacturing often signals broader economic challenges ahead.

Recent data from the Office for National Statistics showed that the UK economy stalled in January, recording zero growth for the month. Economists had expected a modest expansion, making the result an early indication that momentum was already fading before global tensions intensified.

Manufacturers say the coming months will be critical in determining whether the sector stabilises or enters a deeper slowdown. Much will depend on energy prices, interest rate expectations and the resilience of export demand.

Some governments have already begun taking action to cushion the impact of higher oil prices. Japan announced plans to release about 80 million barrels of crude from its strategic reserves, roughly 45 days of supply, in an effort to stabilise domestic fuel costs.

For UK manufacturers, however, the immediate outlook remains uncertain. While production levels have improved slightly from the slump seen at the end of last year, companies warn that a sustained rise in energy prices or a prolonged slowdown in domestic demand could quickly derail any recovery.

Industry leaders say the sector now faces a delicate balancing act: maintaining output and investment while navigating an environment of volatile costs, fragile confidence and slowing economic growth.

Read more:
UK factories hit by ‘collapse’ in orders as costs surge across manufacturing sector

The UK government is introducing new financial incentives for businesses to hire unemployed young people, offering employers £3,000 for each jobless person aged 18 to 24 they bring into work.

The initiative forms part of a broader effort by ministers to tackle rising youth unemployment, with official figures showing that more than 950,000 people aged between 16 and 24 are currently not in education, employment or training (NEET), roughly one in eight young people across the UK.

Under the new policy, companies will receive the grant when they recruit young people who have been claiming benefits and searching for work for at least six months. The scheme, described by ministers as “youth jobs grants”, is expected to help around 60,000 young people into employment over the next three years, although the government has yet to confirm the full eligibility criteria for businesses wishing to participate.

The announcement comes as the government faces growing pressure to address a worsening employment outlook for younger workers. Analysts and policymakers have warned that youth joblessness risks becoming entrenched if more opportunities are not created in entry-level sectors.

Pat McFadden said the initiative would provide young people with a crucial opportunity to gain workplace experience and begin building careers.

“Young people need a vital first step on the career ladder,” he said, arguing that the increase in youth unemployment reflected long-term structural changes in the economy rather than short-term economic disruption.

According to ministers, industries that traditionally employed large numbers of younger workers, particularly retail and hospitality, have been undergoing major transformations for more than a decade due to automation, online shopping and shifting consumer habits.

As part of the wider package, the government will also expand an existing employment support scheme later this year. That programme currently subsidises six-month jobs for people who have been unemployed for at least 18 months, paying employers the equivalent of the national minimum wage for the role.

At present the programme is restricted to younger claimants, but from the autumn it will be widened to include jobseekers aged up to 24 rather than the current limit of 21.

Ministers are also extending so-called foundation apprenticeships, entry-level training roles designed to help young people develop workplace skills. Employers taking on foundation apprentices currently receive up to £2,000 in instalments, and from April the scheme will expand into sectors such as hospitality and retail.

Together, the measures represent a shift in government employment support towards a slightly older cohort of young people than previously targeted.

The plan also sits alongside existing tax incentives for hiring younger workers. Employers are not required to pay National Insurance contributions on employees under the age of 21 unless they earn more than £50,270 a year.

However, the government’s broader employment policies have faced criticism from business groups and opposition politicians, particularly following last year’s increase in employer National Insurance contributions. Critics argue that higher employment taxes could discourage hiring at precisely the moment the government is trying to stimulate job creation.

Despite those concerns, ministers say the new grant scheme will reduce risk for businesses considering taking on younger workers, particularly those who have struggled to secure employment after leaving education.

Meanwhile, a wider government review into youth unemployment is underway, led by former Labour minister Alan Milburn. The review will examine the causes of rising economic inactivity among younger people and recommend further policy changes to improve access to jobs and training.

Its conclusions are expected to be published later this year.

The government is also considering adjustments to future wage policy after some employers warned that plans to equalise the minimum wage across age groups could make it more expensive to hire younger workers. Officials have indicated that while the timetable for implementing equal wages may be reconsidered, the policy itself is unlikely to be abandoned entirely.

With youth unemployment now at its highest level in more than a decade, ministers say the priority is ensuring young people can access their first job and gain the experience needed to progress in the labour market.

Read more:
Government offers £3,000 incentive for firms to hire unemployed young people

Retail entrepreneur Theo Paphitis has stepped in as interim chief executive of Robert Dyas as the high-street chain battles declining sales and changing consumer habits.

Paphitis, who owns the business through the Theo Paphitis Retail Group, said he had taken a more direct role in the company’s leadership in recent months in an effort to stabilise operations and reshape the brand’s strategy in what he described as a “testing time” for the retailer.

The 66-year-old businessman, widely known for his appearances on the BBC programme Dragons’ Den, said he increased his involvement last summer to “steady the ship and refocus the strategic direction” as the company faces a tougher trading environment on the UK high street.

Robert Dyas, which operates 93 stores across the UK, has been grappling with declining footfall and softer consumer demand. Like-for-like sales fell by 5 per cent in the year to the end of March, with the company blaming reduced shopper traffic and unusually mild seasonal weather that dampened demand for some of its core products.

The retailer also experienced a slowdown following a surge in sales the previous year during the height of the cost-of-living crisis. At that time, customers had flocked to purchase energy-saving products such as air fryers, dehumidifiers and related accessories, boosting demand across the sector. As household spending patterns normalised, however, sales momentum faded.

In response, the company said it has begun implementing a series of strategic changes aimed at revitalising the brand. These include reviewing its product ranges, sharpening its focus on traditional home and garden categories, and expanding in-store services designed to drive customer engagement.

Although Robert Dyas has faced a more difficult trading period, other businesses within the group have reported stronger performance. The stationery chain Ryman delivered improved results, with earnings before interest, tax, depreciation and amortisation rising 20.5 per cent to £1.94 million in the most recent financial year. The company expects that figure to grow further to around £3 million in the current year.

Ryman’s recovery has been driven by improved margins, the expansion of its own-brand arts and crafts ranges and the introduction of additional services across both physical stores and online platforms. The retailer is also experimenting with new store formats, including combined outlets with Robert Dyas, partnerships with the Post Office and the rollout of a new “Ryman Design” concept.

Meanwhile, lingerie brand Boux Avenue has also delivered improved results, reporting a significant increase in profitability. Earnings improved by £6.4 million following a 6.9 per cent rise in sales and stronger profit margins. The company expects EBITDA to reach at least £4 million in the current financial year after a strong Christmas and Valentine’s trading period that delivered double-digit growth.

Paphitis has built a reputation over several decades for turning around struggling retail businesses. He first rose to prominence after rescuing the stationery chain Ryman from administration in 1995. He later moved into the lingerie sector by acquiring the UK arm of La Senza in 1998, successfully reviving the business before selling his stake in 2006 for a reported £100 million.

He subsequently founded Boux Avenue before expanding further into the homewares sector by acquiring Robert Dyas in 2012 for approximately £10 million. The purchase came after the 140-year-old ironmongery and homewares retailer had been put up for sale by its lenders.

Reflecting on the challenges facing traditional retailers, Paphitis said heritage brands must constantly adapt to remain relevant in an era when consumer behaviour is rapidly shifting toward online shopping and digital marketplaces.

“We are in a time where other heritage brands, such as WH Smith, have disappeared from the high street,” he said. “It’s a stark reminder to retailers that they must constantly evolve, remember their purpose and give customers a reason to visit their stores.”

He added that modern consumers are more willing than ever to switch between brands and retailers because of the abundance of online choices available.

Despite the difficult trading environment, Paphitis said he believes Robert Dyas can regain momentum through sharper product positioning, stronger store experiences and a renewed focus on its core home and garden categories.

The appointment signals a more hands-on approach from the entrepreneur as he attempts to steer the retailer through what he described as one of the most challenging periods for high street businesses in recent years.

Read more:
Theo Paphitis steps in as interim CEO of Robert Dyas to lead turnaround

Meta is reportedly preparing for a major round of layoffs that could affect as much as 20 per cent of its global workforce, as the technology giant seeks to offset the soaring cost of artificial intelligence investment while reshaping its operations around AI-driven productivity.

According to sources familiar with the discussions, senior executives at the company have begun signalling to leadership teams that job cuts are likely, although the scale and timing of the reductions have not yet been finalised. If the reductions were to reach the 20 per cent level currently under discussion, it would represent the largest workforce reduction since the company’s sweeping restructuring in 2022 and 2023.

A spokesperson for Meta Platforms declined to confirm the plans, describing reports of potential layoffs as “speculative reporting about theoretical approaches”. However, people close to the company say internal conversations about streamlining teams have intensified in recent weeks.

Meta employed nearly 79,000 people globally as of the end of last year. A reduction of 20 per cent would potentially affect more than 15,000 roles.

The potential cuts follow a period of heavy spending on artificial intelligence infrastructure and talent as chief executive Mark Zuckerberg pushes to position the company as a leader in generative AI and so-called “superintelligence”.

Meta has already committed to investing hundreds of billions of dollars into new AI data centres and computing capacity over the next several years. The company has signalled that it plans to spend as much as $600 billion building new data centre infrastructure by 2028 as it scales its AI capabilities.

At the same time, Meta has been offering enormous compensation packages to attract top AI researchers to its new superintelligence research group. Some packages are reportedly worth hundreds of millions of dollars over four years in an effort to compete with rivals in the rapidly escalating global race for AI talent.

The company has also expanded through acquisitions to strengthen its position in the AI sector. Earlier this week Meta confirmed the acquisition of Moltbook, a social networking platform designed specifically for AI agents, while reports suggest the company is spending at least $2 billion to acquire Chinese AI startup Manus.

However, Meta’s AI development push has not been without setbacks. Its latest large language models have faced criticism from developers and researchers, particularly following concerns that benchmark results for earlier versions of the company’s Llama models overstated performance.

Meta ultimately abandoned plans to release the largest version of its Llama 4 model, known internally as Behemoth, after the system failed to meet expectations during testing.

The company’s next flagship AI system, currently being developed under the codename Avocado, is intended to restore Meta’s standing in the increasingly competitive generative AI market, though insiders say progress has been slower than hoped.

Behind the restructuring discussions lies a broader shift in how major technology companies believe AI will transform their workforce.

Zuckerberg has repeatedly suggested that improvements in AI tools will allow companies to achieve the same output with far fewer employees. Earlier this year he said that projects which previously required large teams could now be delivered by a single highly skilled engineer supported by advanced AI systems.

This shift toward “AI-assisted workers” is increasingly reshaping hiring strategies across the technology industry.

Large US technology companies have already begun cutting jobs while simultaneously ramping up spending on AI infrastructure and automation tools. Amazon confirmed earlier this year that it would cut about 16,000 corporate jobs, while payments firm Block recently announced plans to eliminate nearly half its workforce, citing productivity gains from AI.

Workforce experts say the trend reflects a wider recalibration across the tech sector following the rapid hiring surge during the pandemic.

Thea Fineren, chief people officer at IT services company Advania, said the restructuring being considered at Meta reflects a broader shift across the corporate world as AI begins to automate large portions of routine work.

She said companies that expanded aggressively during the pandemic are now reassessing workforce structures in light of rapidly advancing automation technologies.

“Even the world’s most advanced companies are not immune to the accelerating impact of automation and overhiring in the AI era,” she said. “Organisations scaled rapidly during the pandemic and are now confronting the realities of that growth alongside major technological change.”

Fineren said HR leaders must increasingly plan for continuous workforce transformation rather than reacting after technological disruption has already occurred.

Businesses should identify roles most vulnerable to automation while investing in reskilling programmes and new career pathways, she said, adding that companies must maintain a human-centred approach even as AI becomes more deeply embedded in operations.

As artificial intelligence systems take over transactional and repetitive tasks, she argued, employees will increasingly focus on higher-value work that requires judgement, creativity and human interaction.

“It’s not humans versus machines,” she said. “It’s about giving people the best opportunity to add value in areas where human capability still matters most.”

For Meta, however, the coming months could mark another pivotal chapter in its attempt to transform itself from a social media company into one of the world’s leading AI platforms, even if that transformation comes with significant job losses along the way.

Read more:
Meta preparing major layoffs as AI spending accelerates

Companies House has suspended its online WebFiling service after a cyber vulnerability allowed users to access and potentially edit sensitive personal data belonging to other businesses registered on the UK’s corporate register.

The issue emerged after a security flaw in the government agency’s online dashboard allowed individuals to navigate into the accounts of other companies simply by pressing the browser’s back button. According to reports, the glitch could expose confidential information including directors’ home addresses, email addresses and dates of birth – data that could potentially be exploited for fraud or identity theft.

The vulnerability was identified by Dan Neidle, founder of Tax Policy Associates, who alerted Companies House to the issue on Friday. Neidle warned that the flaw could have serious implications if it had existed for a prolonged period before being detected.

“This could be very serious if it’s been around for a long time,” he said, describing the vulnerability as “an absolutely insane flaw in how easy it is to find.”

Following the alert, Companies House confirmed it had shut down the WebFiling system while an investigation takes place. The platform is widely used by businesses across the UK to submit official documents such as annual accounts, confirmation statements and other statutory filings.

A spokesperson for Companies House said: “We are aware of an issue with our WebFiling service and have closed it while we investigate. We apologise for any inconvenience to our customers.”

The temporary suspension of the service is likely to disrupt routine company filings while technical teams assess the scale of the problem and determine whether any data was accessed improperly.

Cybersecurity experts say vulnerabilities of this nature could create opportunities for criminal activity, particularly where sensitive corporate information is involved. Personal data such as directors’ home addresses and dates of birth can be used by fraudsters to impersonate business leaders, submit fraudulent filings or attempt identity theft.

Graeme Stewart, head of public sector at cybersecurity firm Check Point Software, warned the flaw could have exposed company directors to significant risk if exploited by malicious actors.

“This is the latest in a series of public sector data disasters that threatens the privacy, security and personal safety of hundreds of thousands of company directors,” he said.

“A bug of this scale is a gift to cybercriminals seeking to upload false documentation, impersonate CEOs and facilitate data theft. It’s time for a complete overhaul of core systems, with security built in from the outset rather than added as an afterthought.”

The incident has also raised concerns about the resilience of digital systems used by government agencies to manage critical national data. Companies House maintains records for more than five million UK companies and processes millions of filings every year.

Kenny MacAulay, chief executive of accounting software platform Acting Office, said the vulnerability highlighted deeper issues around digital security and system oversight.

“Another day, another massive public sector data blunder,” he said. “It defies belief that hackers can so easily gain access to seemingly the entire dashboard of tens of thousands of companies and their respective directors across the UK.

“Basic compliance requirements should be in place to prevent data leakage like this from happening, with sites thoroughly checked for bugs and security weaknesses on a regular basis.”

Under the UK’s Computer Misuse Act 1990, gaining unauthorised access to computer systems or data can carry serious legal consequences. Accessing computer material without permission can lead to a prison sentence of up to two years, while accessing data with intent to commit further crimes such as fraud can carry penalties of up to five years.

The discovery of the flaw comes amid increasing scrutiny of the UK’s corporate registry system. Companies House has undergone significant reforms in recent years aimed at improving transparency and reducing fraud, including the introduction of new identity verification rules for company directors.

However, cybersecurity specialists say the latest incident underlines the need for continued investment in secure digital infrastructure, particularly for systems that hold sensitive personal and corporate data.

Companies House has not yet confirmed how long the vulnerability existed or whether any data was accessed or misused before the service was taken offline. Investigations into the breach are ongoing, and the agency is expected to provide further updates once the review is complete.

Read more:
Companies House suspends online filing service after cyber vulnerability exposes director data

Rising fuel prices could force some drivers to reduce essential journeys, including hospital visits, as the escalating oil price crisis continues to push up costs at the pump, according to new research from campaign group FairFuelUK.

The survey of more than 37,000 motorists found that 11.9 per cent of respondents believe they may have to reduce the frequency of regular hospital treatment or medical visits if petrol and diesel prices continue to rise sharply. Campaigners warn that sustained increases in fuel costs could have serious knock-on effects for both household finances and wider economic activity.

Petrol prices have already risen by nearly 10p per litre on average since the latest oil market turmoil began, while diesel has increased by almost 14p per litre, according to the FairFuelUK Fuel Price Crisis Survey. The increases come amid continued volatility in global energy markets and concerns about disruption to oil supplies.

Drivers responding to the survey indicated that if fuel prices climb by more than 20p per litre on average, many households will begin significantly reducing everyday spending in order to cope with rising transport costs. FairFuelUK warns that such behavioural changes could have wider economic consequences, potentially slowing consumer spending and increasing the risk of recession.

The findings suggest that rising pump prices would quickly feed through into household budgeting decisions. More than 70 per cent of drivers said they would cut back on hobbies, eating out and entertainment if prices increased further, while nearly 60 per cent said they would reduce spending on branded food products.

More than half of respondents said they would switch to filling up at supermarket forecourts in search of cheaper fuel, while just over half indicated they would reduce the size of their regular grocery shop. Around 41 per cent said they would work from home more often to avoid commuting costs, and nearly 38 per cent would consider using public transport more frequently.

However, the research also highlights the potential impact on social and essential travel. Nearly a quarter of motorists said they would cut back on visits to family and friends, while the proportion who indicated they may reduce hospital visits has raised particular concern among campaigners.

Howard Cox, founder of FairFuelUK, said the government should take immediate action to relieve pressure on motorists and prevent rising fuel costs from feeding through into inflation and weaker economic growth.

He argued that cutting fuel duty could help stabilise prices and protect both consumers and businesses from further economic strain.

“Rachel Reeves could calm inflationary pressure and protect the economy from recession by cutting fuel duty now and promising to scrap any increase in this regressive tax in the lifetime of this Parliament,” Cox said.

He added that UK drivers face some of the highest fuel taxes in the world and argued that reducing the burden would help boost consumer spending and lower operating costs for small businesses.

“The world’s highest taxed drivers deserve relief from the high costs of an essential resource, and the economy needs a boost by increasing consumer spending and lowering costs for small businesses,” he said.

Cox also called for wider reforms to fuel pricing, including removing VAT on fuel duty, which campaigners describe as a form of double taxation, and introducing stricter monitoring of pump prices through a strengthened regulatory framework.

The FairFuelUK survey also explored motorists’ perceptions of how fuel retailers have responded to recent wholesale price movements. When asked whether they had observed pump prices rising significantly before wholesale costs increased, 43.1 per cent of respondents said they had noticed increases at their usual forecourt, while more than half said they were unsure.

Among those who believed prices had risen prematurely, 83.7 per cent identified major oil companies including Shell, BP, Esso and Texaco as having the highest pump prices and increasing them on existing fuel stocks.

Supermarket petrol stations were widely perceived as offering the lowest prices overall, although some respondents reported that supermarkets such as Asda and Tesco had implemented some of the fastest price increases.

Campaigners say the findings underline growing concern among motorists about transparency in the fuel supply chain and the speed at which retail prices respond to fluctuations in wholesale costs.

FairFuelUK is urging ministers to introduce what it calls a robust “PumpWatch” system to monitor pricing across the fuel supply chain and impose significant fines if companies are found to be profiteering.

With global energy markets remaining volatile and geopolitical tensions continuing to disrupt oil supplies, motorists and businesses alike are bracing for further uncertainty at the pump in the months ahead.

Read more:
Fuel price surge could force one in ten drivers to cut hospital visits, survey warns

Formula 1 is expected to cancel the Bahrain and Saudi Arabian Grands Prix as the escalating conflict in the Middle East continues to destabilise the region, with the decision likely to reduce the 2026 calendar to 22 races.

The two races, scheduled to take place in April, were due to form the fourth and fifth rounds of the championship. The Bahrain Grand Prix had been planned for 10–12 April before the sport was set to travel to Jeddah for the Saudi Arabian Grand Prix on 17–19 April.

However, both Bahrain and Saudi Arabia are among several Gulf states that have been targeted by Iranian strikes in retaliation for US and Israeli military operations in the region. The deteriorating security situation has raised serious concerns across international sporting bodies, airlines and logistics operators, with Formula 1 now expected to formally call off both events.

Sources indicate that the announcement could be made before the end of the weekend as the sport assesses the rapidly changing geopolitical landscape.

Safety remains the overriding priority for both Formula 1 and motorsport’s governing body, the Fédération Internationale de l’Automobile (FIA). With tensions escalating across the Gulf and no clear signs of de-escalation, the championship’s organisers are understood to have concluded that staging races in the region in April would present unacceptable risks.

Business Matters, which is currently in China with the Aston Martin Aramco Formula 1 team ahead of the Chinese Grand Prix weekend in Shanghai, understands that the races will likely be removed entirely from the calendar rather than postponed.

If confirmed, the cancellations will leave a notable gap in the early-season schedule. Following the Japanese Grand Prix, which takes place from 27–29 March and serves as the third round of the championship, Formula 1 would not return to action until the Miami Grand Prix on 1–3 May.

That would create an unusual five-week break in the racing calendar during April, a period that normally features several Grands Prix as the season builds momentum.

While Formula 1 has occasionally rearranged or replaced cancelled races in previous seasons, sources suggest that the already packed March-to-December calendar makes it unlikely that replacement venues will be found at short notice. As a result, the 2026 championship is expected to run over 22 race weekends instead of the originally planned 24.

The Middle East has become a key region for Formula 1 over the past two decades, with races in Bahrain, Saudi Arabia, Qatar and Abu Dhabi forming an important part of the championship’s global expansion strategy.

Bahrain first joined the calendar in 2004 and traditionally hosts the opening race of the season, while the high-speed street circuit in Jeddah made its debut in 2021 as part of the sport’s growing presence in the Gulf.

Both races have become major sporting and commercial events, attracting large international audiences and significant investment from host governments.

However, the current conflict has already begun to disrupt global transport networks, energy markets and commercial shipping routes across the region, raising broader concerns about the feasibility of large-scale international events.

Teams, logistics partners and broadcasters also face complex operational challenges when transporting equipment and personnel across a region experiencing heightened military activity.

The situation is being monitored closely by Formula 1 Management, the FIA and race organisers, who are expected to issue formal confirmation once final discussions conclude.

In the meantime, attention remains on the Chinese Grand Prix weekend in Shanghai, where Mercedes driver George Russell is aiming to build on his opening-race victory and extend his early lead in the championship standings.

With the season potentially losing two races, the fight for points could become even more intense as drivers and teams compete across a shorter calendar in what is already shaping up to be a highly unpredictable year in Formula 1.

Read more:
F1 set to cancel Bahrain and Saudi Arabian Grands Prix amid Middle East conflict

The UK and Ireland have strengthened their economic partnership as leaders gathered in Cork for the second UK-Ireland Summit, where Prime Minister Sir Keir Starmer announced £937 million in new Irish investment expected to create around 850 jobs across the United Kingdom.

The investment comes from 15 Irish companies operating in sectors ranging from artificial intelligence and renewable energy to telecommunications and corporate services. The projects will support economic growth in communities across the UK, including London, Doncaster, South Wales and Scotland, and form part of a broader push to deepen economic and strategic cooperation between the two countries.

Speaking ahead of the summit, Starmer said closer collaboration between the UK and Ireland was essential at a time of global economic uncertainty and rising cost-of-living pressures.

“As people on both sides of the Irish Sea feel the cost-of-living squeeze, we are investing in partnerships that make us better off and more secure,” he said. “The UK’s close friendship with Ireland is going from strength to strength, and this new investment is part of a much bigger picture of flourishing cultural, commercial and security ties.”

The Prime Minister added that strengthening relationships with key partners would help the UK navigate global challenges while supporting economic stability for families and businesses.

The new investment is also being framed by the government as a vote of confidence in the UK’s Modern Industrial Strategy, which aims to attract high-value international investment and drive productivity and sustainability across key industries.

Many of the investments have been supported by Enterprise Ireland, the Irish government’s trade and innovation agency, which recently published data showing that the UK remains Ireland’s most important export market. According to the agency, almost two-thirds of Irish companies already maintain a physical presence in the UK and the majority plan to increase their investment over the next 12 months.

A business roundtable held in Cork ahead of the summit brought together senior figures from UK and Irish companies across energy, infrastructure and technology sectors to discuss investment opportunities and economic collaboration.

Robert Adams, president of FOCUS Capital Partners, said London’s position as a global financial centre made it a natural base for international investment firms expanding into the UK.

“The UK is a highly attractive market for investment,” Adams said. “Expanding our presence in London allows us to work more closely with ambitious UK companies and support Irish and international investors seeking opportunities in the market.”

Irish engineering services firm Ayrton Group also confirmed plans to expand its UK operations, citing the size and diversity of the British market as key reasons for its investment strategy.

Managing director Kieran Linehan said the company had long viewed the UK as its most strategic expansion destination.

“The UK market has always been a natural fit for us,” he said. “Its scale, the strong cultural and business relationships between our countries and the shared language make it easier for Irish companies to grow here compared with many other international markets.”

Alongside economic investment, energy security has emerged as a key focus of the summit. Both governments welcomed progress toward the development of two major energy interconnectors linking the UK and Ireland.

One project will connect Wales and Ireland, delivering enough electricity to power around 570,000 homes and representing at least £740 million in private investment across both countries. A second interconnector between Northern Ireland and the Republic of Ireland is expected to help reduce electricity costs and strengthen energy resilience on both sides of the border.

Interconnectors allow countries to share electricity across national grids, helping balance supply and demand. They can enable the UK to export surplus renewable energy to European markets while importing lower-cost electricity when needed.

The projects are also part of broader efforts to strengthen energy cooperation across the Irish Sea as governments seek to accelerate the transition to cleaner power sources while maintaining stable energy supplies.

Beyond energy, the summit also addressed growing security concerns around critical infrastructure. The UK and Ireland agreed to enhance cooperation on protecting subsea fibre optic cables, which carry vast volumes of digital communications and underpin economic activity and national security for both nations.

Both countries will conduct joint exercises to test responses to potential incidents affecting these cables, reflecting concerns about the vulnerability of underwater infrastructure to sabotage or disruption.

In addition, the two governments have refreshed their defence memorandum of understanding to strengthen collaboration on maritime security, cyber threats and defence procurement.

The updated agreement includes measures to improve information-sharing and coordination in response to hostile activity in the Irish and Celtic Seas, including threats posed by Russian vessels and so-called “shadow fleet” shipping networks used to evade sanctions.

The investments announced at the summit span a wide range of sectors and regions across the UK. Irish technology firm Version 1 plans to create around 400 new roles in Northern Ireland in fields such as artificial intelligence, engineering and digital transformation. Aviation technology specialist Amach has announced a £45 million investment to create 150 high-skilled jobs across the UK over the next three years.

Telecommunications infrastructure company Step Telecoms will invest £25 million in a new 200-kilometre fibre optic cable linking the Welsh coast to major data centre hubs in Newport.

Meanwhile, Irish investment firm Elkstone has launched a €200 million venture capital fund, with around 20 per cent of the capital earmarked for startups and scale-ups in Northern Ireland.

Several companies are also expanding in the property and infrastructure sectors. The O’Flynn Group is continuing its investment in the UK’s student accommodation market, including a £35 million development in Manchester that will deliver 173 new student beds.

Other projects include Johnston Fitout Group’s new showroom and office expansion in Doncaster and a £170 million investment by Gas Networks Ireland to decarbonise compressor stations in Scotland.

Together, the projects reflect deepening economic ties between the UK and Ireland, with both governments seeking to strengthen collaboration across industries critical to long-term growth, energy security and digital infrastructure.

Starmer said the strengthening partnership between the two countries was delivering tangible benefits for workers and businesses on both sides of the Irish Sea.

“The action this government has taken to reset relationships and deepen partnerships with our closest allies is paying off,” he said. “It will help us withstand global challenges and protect money in the pockets of families up and down the country.”

Read more:
UK and Ireland strengthen economic partnership as £937m investment set to create 850 jobs

Global shipping giant Maersk has suspended operations at the Port of Salalah in Oman after a drone attack struck oil storage facilities at the strategic logistics hub, intensifying concerns about global trade disruption as the conflict involving Iran spreads across the Gulf.

The Danish shipping group said it had paused activity at the port “until further notice” following what it described as an ongoing security incident near the facility’s general cargo terminal. The move comes as the war in the region increasingly threatens major shipping routes and energy infrastructure across the Middle East.

The Port of Salalah, located on Oman’s southern coast, is one of the region’s most important maritime gateways and had been widely regarded as a relatively safe alternative for shipping companies seeking to avoid the escalating risks around the Strait of Hormuz and the Red Sea.

The port sits at a critical intersection of global trade routes linking southeast Asia with Europe, Africa and the Americas. Since opening in 1998 it has handled more than 50 million containers and over 100 million metric tonnes of cargo, and it recently completed a $300 million upgrade to its container terminal designed to increase capacity and efficiency.

Historically, Oman has promoted the port’s location in a politically neutral country as a major advantage for global shipping operators. The country has long positioned itself as a diplomatic mediator in regional disputes, maintaining working relationships with both Western governments and Iran.

However, the drone strike has now brought the conflict directly to Oman’s shores, raising fears that the war is expanding to new fronts and threatening infrastructure that had previously been viewed as relatively insulated from the fighting.

Images from the port showed thick plumes of smoke rising from fuel storage facilities after the attack triggered a fire in oil tanks. Omani authorities confirmed they were working to contain the blaze but said oil supply continuity had not been disrupted.

The incident is the latest in a series of attacks targeting energy infrastructure and maritime assets across the Gulf region. Earlier this week, falling debris from an intercepted drone sparked a fire that damaged storage infrastructure at Fujairah, a major ship refuelling hub in the United Arab Emirates.

Container shipping has also been affected directly. The Japan-flagged vessel One Majesty sustained minor damage after being struck by an unidentified projectile approximately 25 miles northwest of the UAE.

Maersk said the escalating instability has forced it to adapt operations across its network. The company confirmed that it was redistributing maritime fuel supplies to ensure vessels can continue to refuel and operate despite the growing disruption to storage facilities and fuel distribution infrastructure in the region.

A spokesperson for the company said the measures were designed to ensure that its global shipping network could continue functioning.

“We are proactively redistributing fuel to ensure vessels can continue to bunker where needed and keep our ocean network running without interruptions,” the company said.

The conflict has already left large numbers of ships stranded across the Gulf. Maersk alone has ten vessels currently trapped in the region, while industry estimates suggest roughly 100 container ships are unable to move through key routes.

German shipping group Hapag-Lloyd has also reported that a number of its vessels remain stuck in the Strait of Hormuz as tensions escalate.

In response to the heightened risks, Maersk and other carriers have suspended most new cargo bookings to and from several Gulf countries, including the United Arab Emirates, Oman, Qatar and Saudi Arabia.

The escalation comes as Iran continues its blockade of the Strait of Hormuz, one of the most critical maritime chokepoints in the global energy system. Roughly one-fifth of the world’s oil exports typically pass through the narrow waterway, which connects the Persian Gulf with the Indian Ocean.

Iran’s leadership has signalled that it intends to maintain pressure on global shipping lanes as the conflict intensifies. Mojtaba Khamenei, Iran’s new leader, said this week that Iranian forces would continue enforcing restrictions on traffic through the strait.

Analysts believe the strategy is designed to maximise economic pressure on Western and Gulf nations by disrupting oil and commercial shipping flows.

Danny Citrinowicz, a fellow at the Atlantic Council and a former Israeli military intelligence officer specialising in Iran, said Tehran was likely to escalate further attacks on infrastructure.

“They will raise the bar by targeting more infrastructure,” he said. “The goal is to inflict economic damage and demonstrate that countries supporting the war will face serious consequences.”

The attacks have now affected every member state of the Gulf Cooperation Council as well as Iraq, which has already been forced to shut down parts of its oil production infrastructure due to security concerns.

Oman itself has taken precautionary measures by moving vessels away from its key oil export terminal at Mina al Fahal while authorities assess the security situation.

Another Omani port, Duqm, located roughly 500 kilometres south of the capital Muscat, was also struck during the early stages of the conflict.

Despite Iran’s increasingly aggressive strategy, Iranian officials have denied responsibility for the attack on Salalah. Tehran described Oman as a “friend and neighbour” and suggested that the strike could have been carried out by other actors seeking to widen the conflict and frame Iran.

However, the expansion of attacks across multiple countries has heightened fears among global shipping companies that the war could effectively choke off two of the world’s most vital maritime corridors.

In addition to the disruption in the Strait of Hormuz, Iran’s Houthi allies in Yemen have previously attacked shipping in the Red Sea during the Gaza conflict. Analysts warn they could resume those attacks if the conflict escalates further.

If that occurs simultaneously with the closure of Hormuz, the global shipping industry could face unprecedented disruption to both oil and container trade flows between Asia, Europe and the Americas.

For global logistics networks already strained by geopolitical tensions and supply chain volatility, the suspension of operations at Salalah underscores how rapidly the conflict is spreading beyond traditional battle zones and into the infrastructure that underpins international trade.

Read more:
Maersk halts operations at Oman port after drone strike widens Iran conflict disruption

The UK economy stalled at the start of the year as households cut back on discretionary spending, with restaurants and food services experiencing a sharp decline in activity.

New figures from the Office for National Statistics (ONS) show that gross domestic product (GDP) recorded zero growth in January, falling short of economists’ expectations and marking a slowdown from the modest 0.1% growth recorded in December. Analysts had forecast that output would expand by around 0.2% over the month.

The disappointing performance highlights the fragile state of the UK economy even before the latest geopolitical shock from the escalating US-Israeli conflict with Iran, which economists warn could further dampen growth by pushing energy prices higher and fuelling inflation.

The ONS said the overall economic picture remained “subdued”, with consumer-facing sectors particularly weak. Within the dominant services sector, which accounts for around 80% of UK economic activity, there was a notable 2.7% drop in food and drink service activity as households curtailed spending on eating out.

This contraction in hospitality suggests that the pressure on household finances continues to weigh heavily on consumer behaviour. Restaurants and pubs are often among the first sectors to feel the impact when consumers begin tightening their budgets.

More broadly, the services sector showed no growth overall during the month, underscoring the cautious spending environment facing businesses.

Other parts of the economy also delivered mixed results. Industrial production slipped by 0.1% during January, while construction activity provided one of the few bright spots, expanding by 0.2% over the month.

The flat reading follows a period of slowing economic momentum during the second half of 2025, when uncertainty over tax changes, rising unemployment and lingering cost-of-living pressures led many consumers to reduce spending.

Although the monthly GDP figure showed stagnation, the three-month measure of economic activity, which is typically less volatile, indicated modest growth. In the three months to January, the UK economy expanded by 0.2%, slightly stronger than the 0.1% recorded in the previous three-month period.

However, economists say the underlying picture remains weak, particularly as global developments threaten to worsen inflation and slow economic activity further.

The latest data was compiled before the outbreak of hostilities involving the United States, Israel and Iran, which has sent global energy prices sharply higher. Oil prices have surged and wholesale gas markets have become increasingly volatile, raising concerns about a renewed cost-of-living squeeze for British households.

Prime Minister Sir Keir Starmer warned earlier this week that the longer the Middle East conflict continues, the more likely it is to have a tangible impact on the UK economy.

Higher energy prices are already feeding through to petrol and diesel costs, while households covered by Ofgem’s energy price cap will remain shielded from immediate increases until the next adjustment period in July.

Nonetheless, economists warn that sustained energy price rises could quickly push inflation higher again. Before the conflict erupted, inflation had been expected to fall to the Bank of England’s 2% target by the spring. A renewed surge in energy costs could derail that trajectory.

The shift in the inflation outlook has already affected financial markets. Expectations that the Bank of England would begin cutting interest rates as early as March have largely evaporated, with economists now widely anticipating that policymakers will hold rates steady when they meet next week.

This change in interest rate expectations has had an immediate impact on the mortgage market. Hundreds of mortgage deals have been withdrawn by lenders in recent days, while average mortgage rates have climbed back to levels not seen since last spring.

If the geopolitical tensions persist, analysts say higher borrowing costs and weaker consumer confidence could undermine Labour’s central economic priority of accelerating growth.

Chancellor Rachel Reeves acknowledged the challenges facing the economy, saying the government remained committed to its long-term economic strategy.

“Our economic plan is the right one, but I know there is more to do,” she said.

“In an uncertain world, we are building a stronger and more secure economy by cutting the cost of living, reducing national debt and creating the conditions for growth so that all parts of the country can prosper.”

Opposition figures were quick to criticise the government’s economic performance. Shadow chancellor Sir Mel Stride said Labour had left the economy exposed to external shocks.

“Labour’s economic mismanagement has left the UK vulnerable to the potential consequences of the Iran conflict,” he said.

“They must now take urgent action, including cutting fuel duty, supporting North Sea oil and gas production and putting forward a credible plan to reduce the deficit and bring down the benefits bill.”

Looking ahead, economists believe growth is likely to remain subdued throughout much of the year.

The Office for Budget Responsibility recently downgraded its forecast for UK economic growth in 2026 to 1.1%, down from its earlier estimate of 1.4%.

Yael Selfin, chief economist at KPMG UK, said the latest GDP figures suggested the economy had begun the year on weak footing and could struggle to regain momentum.

“The UK economy started the year on the back foot and activity is expected to weaken further amid sharply rising energy prices,” she said.

Selfin added that government borrowing costs have increased in recent weeks as financial markets reassess the outlook for interest rates. Higher borrowing costs could act as a headwind for businesses and households alike.

“With expectations for weaker growth combined with rising costs, businesses are likely to scale back investment plans,” she said.

For policymakers, the challenge now lies in navigating a fragile domestic economy while responding to external shocks that threaten to push inflation higher and delay any relief from elevated interest rates.

Read more:
UK economy stalls in January as hospitality slowdown drags growth to zero