Are US-Iran Talks Actually Happening?

Summary

Newscast — Are US-Iran Talks Actually Happening?

Date: March 24, 2026
Host: Adam Fleming (BBC)
Guests: Lyse Doucet (BBC Chief International Correspondent), Parham Gohbadi (Senior Reporter, BBC Persian), Economics Correspondent (likely Sarah O’Connor), Faisal Islam (Economics Editor)

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Episode Overview

This episode tackles growing confusion and speculation about whether the US and Iran are engaged in real negotiations to de-escalate their conflict, especially with conflicting statements from both governments. The discussion covers the opaque nature of diplomatic channels, the current situation inside Iran, the regional and global ramifications—especially around the Strait of Hormuz—and how these tensions reverberate through markets and UK economic policy.

Later, the conversation shifts to UK Chancellor Rachel Reeves’ recent parliamentary statement responding to economic turmoil linked to the Middle East crisis, government policy on cost-of-living support, and the politics of energy bills.

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Key Discussion Points & Insights

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1. Are US-Iran Talks Actually Happening?

(Timestamps: 01:09–22:03)

Conflicting Narratives:

• The White House claims “very strong talks” with Iran are ongoing, suggesting optimism about diplomatic progress; meanwhile, Iranian officials categorically deny any direct negotiation is taking place.
• The confusion is compounded by President Trump’s bombastic style and tendency to claim breakthroughs for political gain, even when real progress is fragile or non-existent.

“From the White House’s perspective, the talks are happening and they’re going swimmingly, although we’re not sure exactly how they’re happening. From Iran’s perspective, they’re not happening at all.”
— Adam Fleming [01:09]

The State of Communications

• Lyse Doucet describes two narrowly “cracked open” windows of communication:
  1. Occasional, low-trust contacts between Iran’s Foreign Minister Abbas Araghchi and US envoy Steve Witkoff, mostly through texts or calls.
  2. Speculation about back-channel talks with Mohamed Bagher Ghalibaf, Iran’s parliamentary speaker, who is seen as a “hardline pragmatist,” though this is likely overblown by both US and media narratives.

“He [Trump] gives this impression the door has opened to diplomacy. I don’t think the door is open. One of the windows is the window which has already been shattered twice.”
— Lyse Doucet [05:08]

Iranian Internal Dynamics

• Reporting from inside Iran is “more and more difficult” due to internet blackouts and crackdowns on those sending photos/videos abroad (500 recent arrests).
• The government’s digital crackdown is meant to control both protest narratives and evidence of internal dissent.

“It is becoming more and more difficult on a daily basis. There are some, for example, some people send us directly videos ... But even him [Vahid Online], he’s getting less and less and less videos... The new crackdown is a digital crackdown in Iran.”
— Parham Gohbadi [03:59]

Calculations and Leverage

• Iran claims to be holding its ground, leveraging the closure of the Strait of Hormuz, raising oil prices, and carrying out daily attacks on Israel and US military bases in the region.
• However, there is risk: these strategies could “backfire”, especially if the US/Trump escalates to targeting critical Iranian infrastructure like Kharg Island or the South Pars refinery.

“They are not losing this war… they have some leverage right now, and they want to use that leverage. But there is this risk… this might backfire at some point, because blocking the Strait of Hormuz… might backfire."
— Parham Gohbadi [09:14]

Mediation and Third Parties

• Pakistan, Egypt, and Turkey are acting as message carriers but aren't setting up any real negotiation table.
• Notably, news reports about high-level US-Iran face-to-face meetings in Pakistan seem “fanciful” and unsupported by real evidence.

“Pakistan wants to be seen to be helpful… It seems unbelievable to me that J.D. Vance, the U.S. Vice President, would fly into Pakistan and meet this pragmatist, hardline pragmatist… this weekend.”
— Lyse Doucet [12:31]

Domestic Dissatisfaction in Iran

• Iranian protesters and dissidents are dismayed by prospect of direct talks, fearing that the regime would emerge from the war more repressive and belligerent.
• The regime maintains control through repression, continued arrests, and visible presence in the streets, showing no signs of reform despite claims by some in the West.

“All the signs we see so far is quite the opposite. And this is what people fear the most, that this is going to be a police state after this war.”
— Parham Gohbadi [15:34]

Change in Global Narrative

• Western leaders like Trump and Netanyahu had earlier suggested their interventions were to help Iranian protesters, or bring regime change, but those ambitions are now dramatically reduced in scope.

“You can't bring about a revolution from the air. There has to be a ground component… President Trump… doesn’t talk about [helping protesters] anymore.”
— Lyse Doucet [16:09]

Strait of Hormuz Power Play

• Iran is now claiming a right to charge "tolls" for certain national shipping through the Strait, aiming to generate revenue and rebuild after destruction.
• The closure is selective: allies get through; enemies don’t.

“Iranians are talking about charging countries right now from now on, they say that, well, this was our right, toll. We turned a blind eye to it for decades.”
— Parham Gohbadi [18:00]

Deadlines and Next Steps

• President Trump’s new “five days” deadline for Iran to back down is seen as more about political theater and market manipulation than actual strategy.
• Such cyclical brinkmanship is portrayed as fundamentally misunderstanding the realities on the ground.

“It keeps the world on edge. And it's a very, very dangerous spring for him to think that you could solve the Iran problem or even bring about talks for even a ceasefire in five days.”
— Lyse Doucet [19:20]

Nuclear Question Lurks

• Any future real talks will circle back to Iran’s nuclear program, with hardliners now in charge emboldened by wartime resilience.

“Whatever form [negotiation] takes … it won’t just be about ending this shooting war. We’ll be back to square one about a potential Iranian nuclear program.”
— Adam Fleming [20:03]

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2. Markets, UK Politics, and Energy Bills

(Timestamps: 22:03–52:28)

Market Reactions to the Conflict

• Financial markets have experienced volatility (or “whipsaw” movements) linked to the Middle East crisis, though things have stabilized for now.

Rachel Reeves' Parliamentary Statement

• Chancellor Reeves addresses the government’s approach to potential economic fallout from the war. Key takeaways:
  • No immediate broad bailout or blanket support for energy bills; such support, if needed, will be more tightly targeted at the most vulnerable.
  • Explicit criticism of the 2022 Tory government’s “universal” bailout, which disproportionately helped higher-income households.
  • Continued focus on fiscal prudence and avoiding extra borrowing.

“What she clearly communicated today, didn't quite say it, but it was clearly communicated... you can forget it if those people [top 10% earners] are going to get any support this time around.”
— Economics Correspondent [30:38]

The Politics of Support

• Past government support (energy price cap) helped limit inflation but was expensive and “wasted money” on the wealthy; this will not be repeated without careful targeting.
• Measures to combat potential “price gouging” or profiteering will mainly be about giving regulators more powers and signaling vigilance, rather than direct price controls.

"It's mainly a big megaphone... a threat of a stick to tell them not to do it.”
— Economics Correspondent [44:56]

Energy Bill Mechanisms Explained

• The cap smooths out large fluctuations—consumers pay steady rates, while costs are recovered over time via taxes or public borrowing if needed.
• Changes to "policy costs" have shifted some government-imposed charges from bills to general taxation.

“The government is taking them off and putting them into general taxation... as opposed to... directly onto your bill.”
— Adam Fleming [44:21]

Market, Mortgage, and Rates Uncertainty

• There’s disagreement between financial markets (expecting higher rates) and economists (some expecting rates to fall), with conflict-generated uncertainty making economic responses unpredictable.
• A quote from Bank of England's Governor: “Monetary policy isn’t going to open the Straits of Hormuz.”

Public Consensus

• Wide cross-party and public acceptance of the energy price cap, once seen as radical.
• The expectation is now firmly established that government must cushion citizens from global energy price shocks.

"The idea that people should, should not face the inevitable consequence of rising global gas prices... is now the consensus in parliament."
— Economics Correspondent [41:20]

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Notable Quotes & Memorable Moments

On the opacity of talks:

“I don’t want to call them negotiations because it doesn’t sound like there’s any negotiating happening. What is actually going on in terms of communications between Iran and the US?”
— Adam Fleming [04:47]

On Iran’s regime and likely future:

“All the signs we see so far is quite the opposite... that this is going to be a police state after this war.”
— Parham Gohbadi [15:34]

On the longevity and structure of UK energy price support:

“Those are the direct quotes. So they haven't actually established that this is actually happening [price gouging]... So it's about signaling whose side they're on.”
— Economics Correspondent [35:30]

On the perils of economic uncertainty:

“You can see why accidents do happen. We don’t know how some hedge fund... suddenly becomes a household name next week because it was positioned a certain way in crude oil.”
— Economics Correspondent [50:53]

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Important Timestamps & Sections

• 01:09–13:43: Confusion surrounding US-Iran “talks”; what sources and cracks in communication actually exist.
• 13:43–18:50: Impact of possible negotiations on Iranian politics and public mood; regime resilience and repression.
• 18:50–21:56: Strait of Hormuz tensions and Iranian strategy for leverage in the conflict.
• 22:03–26:46: Economic fallout, focusing on UK policy; Rachel Reeves’ response to market turmoil and energy bills.
• 27:30–31:19: Government’s critique of the 2022 universal energy bill bailout; targeting future support.
• 34:59–38:54: Regulatory powers vs. “vibes marketing”; signaling rather than direct intervention against price gouging.
• 41:20–44:21: Explanations of who pays for capped energy and how policy shifts impact bills and taxation.
• 47:12–52:09: Deep dive into UK mortgage rates, bond markets, and discussion of economic forecasting amid war-driven chaos.
• 52:18–52:28: Lighthearted wrap-up clarifying “whipsaw” and other economic terminology.

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Summary Table of Main Talking Points

| Segment | Topics Discussed | |---------------------------------------|----------------------------------------------------------------------------| | US-Iran Negotiations | Opaque, conflicting accounts; mediation; lack of trust; surface-appearing communication | | Crackdown in Iran | Internet blackouts; repression; lack of reform signals | | Iran’s Leverage | Strait of Hormuz; selective closure; new “toll” practices | | Nuclear and War Dynamics | Hardliners in control; repeat of 12-Day War patterns; protesters’ disappointment | | Markets/Economy (UK Focus) | Rachel Reeves’ fiscal rules; targeting support; regulator powers; inflation | | Politics of Energy Price Cap | Shift from universal to targeted support; consensus around the price cap | | Economic Uncertainty | BoE’s limits; political maneuvering; risk of financial accidents due to global volatility |

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For Listeners Who Missed the Episode

• The episode provides a thorough, nuanced, and sometimes wry analysis of the diplomatic fog surrounding US-Iran “talks,” imparts a sense of the stark lived realities inside Iran, and links broader Middle East instability to the day-to-day economic concerns and politics of UK households.
• If you want a sweeping picture—from dusty Tehran to the energy bills hitting your doormat, via the shifting positions of global markets and ministers—this is quintessential Newscast: calm, incisive, and not a little skeptical about official lines.

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For further updates or engagement, find Newscast on BBC Sounds or join the community using the links in the episode description.

Transcript

[Adam Fleming]

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[Adam Fleming]

hello. Confusion reigns over whether the US and Iran are having talks about ending their war. From the White House's perspective, the talks are happening and they're going swimmingly, although we're not sure exactly how they're happening. From Iran's perspective, they're not happening at all. We'll try and get to the bottom of what's going on in this episode

[BBC Advertisement Voice]

of Newscast Newscast, Newscast from the BBC

[Adam Fleming]

Fat Boy Slim and me in the classroom Violin lessons.

[Parham Gohbadi]

I was the tattletail in the class.

[Odoo Advertisement Voice]

Can I have an apology, please?

[Parham Gohbadi]

I trust almost nobody that Daddy has

[Adam Fleming]

to sometimes use strong language.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Next time in Moscow I feel dulu with no salulu.

[Danielle Fishel]

Take me down to Downing Street.

[Adam Fleming]

Let's go have a tour.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Blimey.

[Adam Fleming]

Hello, it's Adam in the studio, and in a moment we will focus on what's going on between the US and Iran. And later on in the episode, we'll be catching up with Faisal Islam because Rachel Reeves, the Chancellor, did a statement in Parliament at lunchtime on Tuesday talking about the government's thoughts about economic support in the face of the market turmoil and increasing energy bills as a result of the conflict in the Middle East. But first of all, what is going on with these negotiations between the US and Iran? I was confused listening to yesterday's newscast. Let's see if I become less confused when we talk about it now, because here to help me work out what's going on in the newscast studio is Lis Doucet. Hello, Lisa.

[Lis Doucet]

Good to join you, Adam. It's a bit worrying that when I join you too often.

[Adam Fleming]

Well, I mean, it's still nice to see. It's always nice to see you on a personal level.

[Lis Doucet]

It is nice. And it is really nice to be here with our other guests.

[Parham Gohbadi]

Thank you. It's my pleasure to be here.

[Adam Fleming]

Yeah. That's Parham Gobadi, a senior reporter from BBC Persian. Hello, Parham. Welcome to newscast.

[Parham Gohbadi]

I'm really happy to be here with you guys.

[Adam Fleming]

I mean, working on the BBC's Persian service in the last couple of weeks, what's it been like?

[Parham Gohbadi]

Hectic, really Hectic. So I remember the first day that the war broke out. I was on air for 24 hours.

[Odoo Advertisement Voice]

Wow.

[Adam Fleming]

So, yeah, even Lisa's impressed by that.

[Lis Doucet]

No, no, no, because I watch on the. We have this. Okay. Like everyone in around the world, we all, everyone has WhatsApp groups and people like you and others don't go to sleep because, and, and sometimes I feel guilty. I'll go to bed early in the morning and nothing I can't do anymore. And then I'll. And I'll wake up then in the morning and I'll look and I'll think, well, they didn't go to bed. But I mean, but seriously, I mean, obviously it's a huge, huge personal and professional interest to you and everyone here, including you, have been working night and day.

[Parham Gohbadi]

Yeah, yeah. Sometimes waking up for, I think 10, 12 days. We were waking up two in the morning, and then I was here at MBH 4:00am and then we were, I was on air at 5:30 and then throughout the day. So it was.

[Adam Fleming]

And what are the most reliable sources for finding out what's actually happening on the ground in Iran? Because I feel the actual kind of the physical reporting of the conflict doesn't exist in this war as it has done for others.

[Parham Gohbadi]

It is becoming more and more difficult on a daily basis. So because of the Internet, you know, blackout, it's become extremely difficult. There are some, for example, some people send us directly videos. That's part of our material. But also there are some telegram channels, like a really reliable one called Vaheed Online. But even him, he's getting less and less and less videos. So these days we see that he's just posting pictures, picture two or maybe one or two footage from inside the country. And the reason for that is that they are arresting. Like today they said that they arrested almost 500 people. Those who they believe they sent material to foreign channels and foreign sources like Vahid online, like us, like other Persian channels. So they're tracked. So the new crackdown is a digital crackdown in Iran.

[Adam Fleming]

And we'll talk a bit more about what's happening in Iran in a second. But lis, I just wanted to catch up with what we were discussing on newscast yesterday, which is these, I don't want to call them negotiations because it doesn't sound like there's any negotiating happening. What is actually going on in terms of communications between Iran and the US which some people in the White House are calling negotiations?

[Lis Doucet]

Well, President Trump always speaks in a very bombastic language, whether he's talking about war or talking about peace. And there's often a little bit of truth in them. And that may sound disrespectful, but I think he also uses this as a tactic because it's been widely said that his announcement that in his, his words, very strong talks are taking place with Iran now and that they're going to lead to a total and complete resolution of hostilities in the Middle East. And that brought him back from a very dangerous brink. I mean, to remind our listeners, he had given Iran 48 hours to open up that critical waterway having an impact on all of our lives, the Strait of Hormuz, or he would then destroy Iran's power plants and energy infrastructure. So just when the clock was ticking down, he suddenly announced that there had been this breakthrough. And predictably, the oil prices went down, the stock market went up, everyone breathed a sigh of relief. And there are multiple reports that there was insider trading as well. It has. Those accusations have to be proven. But there was a huge increase in the volume of trading. So President Trump has to be mindful of this growing pressure on him to find a way out of this war. As for very strong talks, I'll be interesting what Pot Hom says, it seems to me that there are two windows and the two windows have opened by a little crack. So it's not he gives this impression the door has opened to diplomacy. I don't think the door is open. One of the windows is the window which has already been shattered twice. And that is when Iran's lead negotiator, the foreign minister, Abbasarakchi, has been speaking to the US Envoy, Steve Witkoff. And we understand that there have been communications between tempted on telephone text messages. But there is so little trust in that process because both times they talked before June last year, February this year, the process was shattered by another outbreak of war. Israeli Attacks backed by the United States. So there's no, there's no trust there. The second door, and we can discuss about the second window which has been opened is President Trump is also saying that he's talking to a top official. He said, I can't tell you who it is because he might be killed. Well, Israeli media came out and said who they believe this top official is. And it's mentioned that it's Mohammed Bagar Kaliba, who, who is the speaker of Parliament, although the parliament is not meeting now. Obviously a man of the system who's played key roles, including being head of the air force with the Islamic Revolutionary Guard Corps, being the police chief, also the mayor of Tehran. He's regarded as a hardliner who, to use an expression, someone used to me today that may be more ideologically flexible. In other words, President Trump is a hardliner and pragmatic. Well, sometimes he's got a checkered history, sometimes he's ran four times for president and never won, and sometimes he's a moderate and sometimes he's a hardliner. So he does seem flexible. But to finish my comment, President Trump keeps looking for a Delsey Rodriguez, in other words, an Iranian version of the Venezuelan vice president who then became president once Nicolas Maduro was extracted by American military action. And of course, this betrayed. And since then, he's been able to President Trump's administration has worked with her, a powerful player who's also a pragmatist, who has been willing to a certain extent to bend to President Trump's will. But it betrayed a fundamental misunderstanding of the differences between Iran and Venezuela. You just can't choose one person and expect them to be able to go along with what you say, especially not Iran.

[Adam Fleming]

So we think there is a channel of communications open between the foreign minister of Iran, Steve Whitman.

[Lis Doucet]

Preliminary. Preliminary, yes. Very, you know about talks about talks de escalation don't hit energy infrastructure, very, very limited. I don't know what Perham.

[Adam Fleming]

Well, and then on the second thing, then Parham, what do we think is actually happening with Gallebaaf, the speaker of the parliament?

[Parham Gohbadi]

So the most important thing, as you mentioned, is that there's this lack of trust that has become way more it has deteriorated over the past two conflicts that Iranians say that we were in the midst of negotiations and we were attacked both times. So there is this lack of trust.

[Adam Fleming]

There have been three rounds of negotiations in Geneva.

[Parham Gohbadi]

But apart from that lack of trust, Iranians are right now saying that all of these officials are saying that we want, we're not going to finish this war because we want to make sure that we are not going to be attacked like the past two times. And from their perspective, they have, you know, they are winning some somehow because they've managed to block this Strait of Hormuz. The oil prices have gone up. They are managing to hit Israel almost on a daily basis, and their missiles are targeting places here and there. They're attacking all the military bases around US bases around in the region. So from their perspective, they are, you know, they're not losing this war. They're being attacked, of course, but they have, they have some leverage right now, and they want to use that leverage. But how, but, but, but there is this, there's this risk for them that this might backfire at some point, because blocking the Strait of Hormuz and all these things that they're doing, it might backfire. And Trump is, you know, it's unpredictable. You don't know what his next move is. Is he going to attack Iranian infrastructure? Because that will not only damage the Islamic Republic, it will damage Iran as a whole and the future of millions of people. So the strategy. And what if, for example, Donald Trump decides to bring marines in the 5,000, you know, Marines that they transferred from Japan. What if they're going to occupy Hark Island? And, for example, that, that is where 95% of Iranian oil export is from that terminal or South Parse refinery, that over 50% of Iranian gas export is from there. If that is damaged, that is Iran's lifeline and that can cripple the Iranian economy.

[Adam Fleming]

Yeah, interesting. Just seeing sort of the stakes from the Iranian point of view.

[Lis Doucet]

And so that, I mean, Parma's outlined what some of the other scenarios are, which has underlined why Iran is still suspicious. And the response from the Foreign Ministry about all this, these talks. First of all, the Iranian Foreign Ministry and other officials have absolutely denied that any negotiations, talks are taking place, but that there have been initiatives from friendly countries. And we know that Pakistan, Egypt and Turkey, who have not been on the front line militarily of this war, have now been more actively involved in sending messages between the two sides. But the statements from the Iranian foreign minister also say that they see this as just President Trump, as I mentioned, trying to bring down stock prices, but also trying to distract Iran from the military buildup, because there still is quite a few days before these thousands of Marines arrive in the theater. There's also talk of possible, even ground troops being used. And so you need time. And so President Trump has to find A way to deal with the markets, to deal with the political pressures while the, while the preparations for another escalation take place.

[Adam Fleming]

You mentioned Pakistan. I mean, you read some news websites and it sounds like Pakistan is setting up the negotiating table, getting the flags and arranging some kind of peace conference. But I'm guessing that's actually not what is happening.

[Lis Doucet]

Pakistan wants to be seen to be helpful. Pakistan's military and political leaders have really cultivated their ties with President Trump. They're very close. They have also, like Turkey and other Islamic countries have joined this expanded Arab ministers forum to try to deal with the, with the Gulf crisis. So they want to play a more pivotal role. So it was announced. It seems unbelievable to me that J.D. vance, the U.S. vice president, would fly into Pakistan and would meet this pragmatist, hardline pragmatist. However, you want to describe Mohammed Kaliba in Pakistan this weekend, which to me right now seems fanciful. You know, maybe somewhere down the line when they've, when they're not at war, when the gaps are not so wide, but they're nowhere near that, there's a lot more diplomacy that has to be done. But that was the report. And just before I joined you, there were reports in Pakistani media that Mohammed Kaliba had already arrived. And so there's a swirl of speculation. And our correspondent in Pakistan is talking to people who are monitoring the flights like the plane spotters, talking to other sources to see whether anyone's arriving from Iran.

[Adam Fleming]

But Parham, the idea of face to face talks between the Americans and the Iranians in Pakistan would be so different from any of the diplomacy between the US and Iran for the last 40 years.

[Parham Gohbadi]

That's correct. And that will dismay many Iranian protesters and those who oppose the regime. Today we just received a video, wahed online published it, that we could hear Iran's anti air defense system and the sound of bombardment in the background. And some people were chanting long live the king, referring to the Iranian prince in exile, Reza Pahlavi, the son of the late Shah of Iran. So now those people and Iranian protesters, they would be really dismayed to see any kind of negotiation between the United States and the Islamic Republic. And the reason for that is, and all the signs show that, that if this regime stays in place after this war, we are going to have a more belligerent and hostile regime that feels strong, that feels, that can have a sway even over the most powerful military in the world and the most advanced military in the Middle East. It has a say and it has some strength. And let's not forget all of this war is happening just, just two months after thousands of Iranian protesters were killed. What we see during the war is that all the time, every day, literally their supporters are on the street and they're asking their supporters not to leave the street because they want to create that atmosphere that we are still in charge, we are still in control. And they're arresting thousands and thousands of people on a daily basis. So all the signs when you are following, you don't see that. Okay, now that Ali Khamenei is gone, we are going to have Mujtaba who is going to be, because this is what some people said to be the mbs Ben Salman of Iran.

[Adam Fleming]

He's going to reformer, reformer.

[Parham Gohbadi]

This is not happening. First of all, we don't know if he's in what condition, health condition he is in because there's no audio and there's no video of him released yet, although he has given two statements, it's written a statement. So we don't know if he's really in a state to lead the country. But this absent leader, even if he's there somehow leading the country, there is no sign, not even one, that the country is leaning towards some reforms. Actually, all the signs we see so far is quite the opposite. And this is what people fear the most, that this is going to be a police state after this war.

[Lis Doucet]

This is great disappointment too, because you remember in the first eight minute long video on February 28th when the war began, when President Trump gave all of his reasons for going to war was that that he wanted Iranians to rise up after the bombing has done. He said you can go and this will be your best chance in a generation to take control of your government. And that was echoed by Prime Minister, the Prime Minister of Israel, Benjamin Netanyahu. And again this week, Prime Minister Netanyahu, Israel has been talking about, he was saying, well, it's hard, you know, you can't just, you can't bring about a revolution from the air. There has to be a ground component. That's in fact what he said last week. But he talked about there could be ground components. Hence the speculation about, well, what kind of a ground component would that be? Would that be troops on the ground? Would that be an intelligence operation? But there had always been this idea about President Trump saying I'm coming to help the protesters, but he doesn't talk about that anymore.

[Adam Fleming]

And so this is negotiations with the

[Parham Gohbadi]

you pointed out a very interesting and very important point, that it seems that even Israel, who was hell bent on changing the regime in Iran is now has come to this realization that this is not that easy to, to do the regime change with an air campaign. And we see that in the opposition as well. They're right now saying that, well, that was not the goal from the very beginning, but that's not quite true because they were saying that they aim for a regime change. So right now it's becoming more and more clear that although all the top officials, many top commanders have been killed in the airstrikes, that the system is still in place and they are managing to control the people.

[Adam Fleming]

We mentioned the Strait of Hormuz. It doesn't seem that the Strait of Hormuz is closed for all nations shipping. But if you're a certain country, your ships might get through, you might be allowed through.

[Parham Gohbadi]

And Iranians are talking about charging countries right now from now on, they say that, well, this was our right toll. Yeah, we turned a blind eye to it for decades. Now our policy is going to change. We're going to set some toll, and we're going to ask every country that wants to pass through this strait, they need to pay us. So because they are looking for, you know, they need some revenue in order to build what's been destroyed in Iran. And let's not forget that oil prices,

[Adam Fleming]

that's kind of Trumpian.

[Parham Gohbadi]

Yeah, Oil prices have gone up, you know, by two times, I think, if I'm not mistaken. And Iran is able to sell its oil to China still. And if they get some toll and they're targeting the countries and they're targeting Israel. So. And they're blocking the Strait of Hormuz. So for them so far, you know, they think if this war finishes today, they can claim victory. Whether it's true or not, that's a different story.

[Lis Doucet]

It's such a reminder for. A reminder was needed that as military planners will say, no plan survives contact with the enemy. And it has now gone from changing the regime in Iran to actually changing the military balance around this critical waterway, the Strait of Hormuz, and changing it in Iran's direction. They have shifted the battlefield.

[Adam Fleming]

And Trump's new deadline is, is five days from Friday. So the market closed on Friday. So basically on Friday night, we'll have a very similar feel to Sunday night, basically.

[Lis Doucet]

I mean, he always gives these deadlines. You know, two week dead. Remember, in, in 2025, he said, I'm going to take two weeks to think about what I should do on Iran. And then a day or so later, he then attacked. Attacked Iran. So they're always notional, but it keeps the world on edge. And it's a very, very dangerous spring for him to think that you could solve the Iran problem or even bring about talks for even a ceasefire in five days. Again, it shows a fundamental misunderstanding, a failure to grasp the details of the confrontation that you have now not only dragged America into, but in fact, in terms of its impact the countries around the world.

[Adam Fleming]

And Parham, just a closing thought from you. Presumably, if there is some kind of negotiation, whatever form that takes in whatever third country it happens in, it won't just be about ending this shooting war. We'll be back to square one about a potential Iranian nuclear program.

[Parham Gohbadi]

Again, Mohammad Bogre Gholibow, the current Iran's parliament speaker, said that after, during the 12 Day War, the previous war, when all the commanders, top commanders, were assassinated and killed on the day one of the war, he was the one who later said that took control, and he was the one in charge of the fight against Israel. So I wouldn't be surprised that he will be the person who is in charge at the moment, especially after Ali Larijani, the head of the Iranian Supreme National Security Council, was killed last Tuesday. So I wouldn't be surprised if he's the person who is in charge. And these are the people who are coming from the Revolutionary Guards. They're ideological, as you said. He's a pragmatist. However, he's been involved in the crackdown of protesters. So he's pragmatic, but with a Revolutionary Guard background. And, and these people, they do not want, they have the experience of fighting against Israel and the United States. And during the last period of war, 12 day war, he said that, yes, we were shocked and we were disoriented for the first three days, but we managed to retaliate. And we were, as we were approaching, day by day, we managed to target more and more targets in Israel. And when I see the pattern of this war right now, I see the same thing happening. Yes, Iran was a little bit, you know, disoriented in the first few days or first few weeks of the war. But day after day, right now, we see that Israel is being targeted more and more and more and more countries in the region are being targeted because the missiles that Iranians shoot are way cheaper than Tomahawk missiles that need to defend the airspace and those countries.

[Adam Fleming]

So interesting. Parham, thank you very much for joining us.

[Parham Gohbadi]

Thanks for having me.

[Adam Fleming]

And Lisa, good to see you too.

[Lis Doucet]

Thanks. Good to join you. Adam, in Parham, thank you.

[Adam Fleming]

Now, before I spoke to Parham and lies, I caught up with Faisal Islam, our economics editor, because we wanted to talk about what Rachel reeves had told MPs in the House of Commons at lunchtime on Tuesday about the government's thinking about how to handle the economic turmoil triggered by the war. But actually it ended up being a much wider ranging conversation about how the whole world and, well, our brains might handle the economic turmoil. So here is my extended conversation with Faisal, which went off in all sorts of different directions quite far beyond what Rachel Reeves said in Parliament.

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[Adam Fleming]

Well, what a day for me to miss the turmoil in the global markets yesterday. But have things sort of stabilized a bit?

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

They have a bit today. They've sort of stabilized at that higher level. They're still like very much. You can see the consequences of the conflict of the past three weeks, but we don't have that sort of seesaw roller coaster. Whipsaw, I think, is what people said.

[Adam Fleming]

And that's really a British no, just

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

you Hear it and you sort of, you sort of assume you know what it means and. Yeah, it's probably what it is.

[Adam Fleming]

I'll look it up while you're answering my next question. Question which is into all of this, Rachel Reeves, the Chancellor walks, giving a statement to Parliament at lunchtime. I suppose we can look at it on two levels. There's the kind of, the detail of what she, she talked about and then there's the bigger picture and some of the hints that she drops. Let's do the detail first of all. Yeah, there actually wasn't very much of that.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

No. If anyone was expecting some big announcement of some sort of bailout package, this was never the moment for that. There's a lot of sort of. Let me take a step back. A lot of economic policy is a. Is about getting the nation on a psychiatrist couch and kind of massaging, you know, sense of confidence in the normal times. But then in a time of crisis and potential multiple crises, as a government, you want to look like you're in control, in charge. And this is especially the case where you have a very fragile kind of series of systems in the economy. You know, famously the, the petrol delivery system or the food supply, whatever, all these things are just in time and they rely on people staying relatively calm and normal. So I think that they are trying to. This is a big meta point here. They're trying to project.

[Adam Fleming]

I mean, I did ask about the detail, but that's.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yeah, yeah, yeah, well, well, they're trying, they're trying to project that, you know, that they're across all of these complicated supply chains. And then there's a lot of talk about what might happen. And I think it's not scare mongering, it's a reasonable question to say, well, what would happen if this sustains for three months? If these prices sustain for three months. And then you do have a set of choices. So on the, on that, on the matter that I think is most sort of politically contentious and which sort of people at home will be kind of attuned to the most, which is what will happen with energy bills. The curious thing is nothing at all. In fact, they'll go down for the next three months, but everyone is understandably anticipating what happens come July. Again, even then, there's a bit of a cushion because summer is when we use 7% of our energy. And so even in the sorts of scenarios that people are painting right now, with the gas price sort of staying where it is, yes, you are looking at higher prices, but you're probably looking at an impact over summer of about 10, 15 pounds a month. Month for an average household. Notable, but not the sorts of levels that we saw that caused disaster in 2022 and needed a massive bailout.

[Adam Fleming]

Although Richard Reeves is actually quite, quite critical of the old bailout, wasn't she under the Tories?

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Now that was interesting because I frankly haven't heard. I did hear that argument privately last week. I was like, oh, that's interesting. And so, in trying to say what they might do in the future, they chose to really kind of give a good kicking, I would say it's a technical term to what happened in 2022 in similarish circumstances. Now, to be clear, the gas price spiked twice as high and so the problem was twice as big, but at that point there was a universal limit put on typical household bills of two and a half thousand pounds. Of course it varied based on how much gas you use now. But this is a really important point because that meant if you used more gas, you essentially got more support.

[Adam Fleming]

Yeah. Which means rich people benefited.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yes. And, and what they have done, which I didn't know they were going to do, is they put a number on that and they said the top 10%, the top 10 richest households got an average of 13, 50 pounds worth of support. And what she clearly communicated today, didn't quite say it, but it was clearly communicated in, is you can forget it if those people are going to get any support this time around. Now, of course that has been interpreted by, you know, I know people in the conservative leaning press are saying, well, middle class people won't get this and, you know, we just don't know. It sort of depends on how much help might be needed, but very, very, very clear steer from the Chancellor that whatever package emerges, if needed, will be targeted on those with the most need.

[Adam Fleming]

For example, like we've already seen with the help for heating oil, that's only for lower income households, that's not for everyone that uses oil. Yes.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

And I guess if you use that as a example, though I think it probably is not is hyper targeted. It's pretty small, right. 53 million. There are plenty of people, I would say, who would never.

[Adam Fleming]

But it's not, it's not a blanket bailout for people every.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

No, no, no, no, no, you're right. I think that the, the lesson or the signal from that, from the heating oil support was that that, I mean, that really is hyper targeted via council mechanisms to the very, very poorest identified households. It isn't even approaching being something that is, I mean, not forget universal. But it's not even anything that's particularly broad right now that if they did that in the energy bills, faced with a even a half the shock that we had, you know, that would be quite a choice. Two things really, really interesting, I think firstly, she made that announcement with one eye on managing expectations of the public, public, but another eye pretty clearly on the markets that we have talked about,

[Adam Fleming]

because she said over and over again, I'm going to stick to my fiscal rules, whatever happens.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yes. And I think this may also reflect some angst about the reporting of a Cabinet meeting last week. I think it was in the Times that suggested there was some chat around the Cabinet table about, you know, being more flexible around her famous rules that limit borrowing so that we could afford a bigger support package for energy. And so they were keen to knock that on the head so everything will be affordable in the existing rules. That suggests a few billion, not tens of billions. To go back to your original point, yes, she, you know, she gave a good. Wasted money on richer households was the, was the key phrase. I think there's a reasonable argument to say. I'm not sure how much of that argument we heard at the time in September 2022, do I, I.

[Adam Fleming]

Not many people in other political parties are opposed to universal.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

I, I, yeah, I, I haven't gone through Hansar, to be honest, but I, I definitely don't have the sense that I can recall vividly people saying, well,

[Adam Fleming]

and of course, as Chris Mason always recalls, the day that Liz Truss announced her huge, huge, huge energy price guarantee is the day that the late Queen died.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yes.

[Adam Fleming]

So not many people were paying attention.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Well, it was an incredibly important thing.

[Adam Fleming]

We didn't get those 20s of billions apart cents that it cost.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Well, at that point it was going to cost 80 billion.

[Adam Fleming]

Yeah.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Ended up costing 40 billion. But like Site, it didn't, didn't get on the news that night, but it obviously did hugely help limit inflation, even though it got to massive double digits. I mean, and it helped hugely save a lot of people. But now the government say that was wasted huge amounts of money, many billions of pounds, and they wanted to send that message to the markets where there has been, across the world, there's been been a sort of an issue with government debt, the effective interest rates being charged to governments or all governments. But the UK has had a sort of special attention, I think it's fair to say, has gone up. And so that is a message that there won't be a sort of fiscally imprudent spending that she was clearly wanting to get out. And so that's a balancing act. So you can get there with the use of data. You can use things like social tariffs, you can operate it through the energy companies. Companies, they do have a bit of time even with the forecasts that are coming through about what, what could happen in July. It's a, It's a lot 1900 for typical house household for their dual fuel bill. But to give some context that energy price guarantee we just talked about that came in at two and a half thousand. Right. So but you know, the general vibe was very interesting. I thought, I don't know, you know, all this like we're going to hammer down on prices in price gouging and profiteering.

[Adam Fleming]

Well, because that was the, the point I was starting off on with the detail of what she announced today. The detail stuff that is actually happen about powers for the competition and markets authority to make sure that companies aren't ripping people off and using this war as an excuse.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

It was an astonishing release actually to read through it because it was all hammering down, cracking down on this thing. But in every sentence of this press release that I saw there was a. If it's happening where it might occur, if it transpires that sorry, there's fear

[Adam Fleming]

of price G rather than price gauging itself.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Those are the direct quotes. So they haven't actually establish that this is actually happening. Right. That's important to say now it's fair.

[Adam Fleming]

So it's about signaling whose side they're on.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Well okay, yeah. So the incredibly cynical and occasionally journalists are cynical interpretation skeptical would be that this is entirely sort of vibes marketing. We're on your side. I do think it's a bit more than that. There are some powers of inquiry and sunlight light that the competition authorities can shine just by having access to the data, just by forcing these companies up and down the supply chain to report it makes you think twice. You suddenly think you're going to be comparable. They have this fuel finder comparison website where you can check, you know and suddenly you're thinking, you know, so that could act as a force for competition where it's definitely true that in the past you have had some flab added when a wave of inflation has come in and then it famously goes up like a rock at these prices and they come down like a feather. But then I, I also think that they're using what they, you know, what the Americans call the bully pulpit just to get inside the minds of these supply chains at every level. Are you know, Are you absolutely sure you really want to? Yeah. You put up the 5%, that's your cost, you might put up 6% to account for something else, but you're going to put it. If you're going to put up 10, you might not get away with it. It is a, it is a sort of, again, a sort of psychological operation to get in the minds of the people in the supply chains. Not to go too far to say we're watching what they would actually do if they did it. Now, from the sorts of words we're hearing, you'd think, you know, they'd be getting the handcuffs out. Maybe, maybe, maybe some knuckle dusters as well. I don't think that's what's happening. What's happening is like the. It's open data and shaming and pointing fingers. It's not fixing of, it's not fixing of prices. But there will be some new powers we have for the competition marks, authority. The great irony here, Adam, is this, which is just a year ago, these same authorities, the regulators, were being hauled over the coals and indeed one of them got fired for being too tough on business.

[Adam Fleming]

Oh, yeah, because they were stifling growth,

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

they were stifling growth, they weren't being sort of pro growth enough. And now, and I think they would argue, the government would argue, well, these things are not in conflict. But you know, really the criticism was that they were too obsessed with consumers and consumerism and, and not helping and the red tape that comes with that. This would seem to be a rather different emphasis to the emphasis that these regulators were forced to run with just last year.

[Adam Fleming]

I thought it was a very interesting intervention from Jeremy Hunt, the former Chancellor, who told Rachel Reeves to stop being so partisan in what she was saying because she'd had quite a go at the Conservatives for being too gung ho about the war in Iran and she was making the case that, oh, it's just because the UK is held back and being prudent that we're not involved in it and that's a good thing. And he was saying, oh, be careful about how partisan you are in your remarks because you'll need cross party support for if things get worse. I also wondered if that was him warning her not to rewrite history because actually everybody was in favour of the energy price help the last time round. Also, I wonder if it was a message to the Tories as well, to also be less partisan about this.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yeah.

[Adam Fleming]

And a little bit more, let's act together in the national interest.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yeah. I mean, there's a lot of priorities that change with the new reality that we face.

[Lis Doucet]

Space.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

And if you take a step back, we have energy prices that are higher and could be structurally higher for a few years. We have the issue around defense spending, how you make space for that. It was tough enough when the, say the 10 year bond yield was closer to 4, it's now close to 5. That's going to have an impact on interest rates if that sustains. So I think that's probably what he's talking about, a sort of consensus. I mean, she does have quite a lot of mps and probably difficult to

[Adam Fleming]

imagine her needing relying on Tory votes. Yeah.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

But it is interesting and we've said this before, but it is just worth underlining where we are, which is there's a general consensus on something like the energy cap. Nobody's suggesting change the energy cap. Everyone's accepted the fact that despite the fact that the underlying gas price has rocketed, everybody's gas bills should be cut. Nobody's suggesting that. Stupid, stupid. Remember when it first was floated by one Ed Miliband as opposition leader 10

[Adam Fleming]

years ago at a Labour Party conference

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

and you know, even with.

[Adam Fleming]

And people said it was Marxist, people

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

did, and then it was adopted by the Conservative Party and now it's immovable. And then similarly on, you know, the first instinct when gas prices go up is now even before they've actually, you know, the rubber has hit the road in terms of bills. Everyone's like, how can we prevent the.

[Adam Fleming]

Yeah, no, that bill's history of the energy price cap is fascinating because I remember being at the Labour Party conference in Brighton where it was the rabbit out of the hat in his leader's speech because Ed Miliband, of course was leader of labor at that point. And yeah, the reaction was huge and mostly quite negative because people said the energy price cap would distort the market

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

and the energy industry was just chucking quotes at us about how insane this was and it's now a total unarguable mixture. And I don't think a single party would argue with what is a form of price fixing, which, you know, right now, you know, when you think about what would happen without it. Likewise, let's go further than that. The idea that people should, should not face the inevitable consequence of rising global gas prices. You know, that is now the consensus in parliament cross party is they shouldn't. Now, there may be a debate about the degree, but that's the reality on

[Adam Fleming]

the energy price cap. We've had a question from NEWSCASTER Jenny who says can you tell me who's paying the extra cost of my energy? As I understand it, the government has capped my energy bill until June July, but presumably somebody is paying the increased cost. Now is it the energy companies or the government slash taxpayers.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

That's a great question. So this cap, the normal cap, so we're talking specifically about this. It's it. We all sort it, it just smooths over the price right into three month blocks. So I think the answer is you will pay it in three months time but you won't have to pay it going up and down, up and down and up and down and up and down. It will be sort of managed. Now if it goes too high and you get some sort of bailout like we had in 2022 and they then put an upper limit on where that should go and that could be two and a half thousand, 000 like it was in 22. That's then the taxpayer or borrowed money

[Adam Fleming]

and it's probably you to compensate the energy companies for the money we're not giving them as bill payers.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

So. And that. And that's into the future now the mechanism is eluding me. There was some, There was a very interesting mechanism of repayment but yes, essentially

[Adam Fleming]

I used to know that.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Well, this is the four year old policy and it's not entirely clear, clear that they would repeat anything quite like this but a social tariff which would normally have been put on bills for everybody you would expect maybe would be funded from taxation, which in turn would be funded from borrowing, which in turn would be paid for by future taxpayers. Indeed that was Rachel Reeves argument today was that we are now paying the bill for having, quote unquote wasted the money on richer households. Another little detail here which I always like was some purport because we have such bad insulation in British houses compared to say German houses of the.

[Adam Fleming]

No, you said this last week. Oh, I'm using the air outside our house.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yeah, yeah, sorry, sorry, sorry. I'm getting old.

[Adam Fleming]

I just started several million pounds lodged in my mind.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Several billion. Well, someone's looking. Do you know you can do this with infrared cameras. You take pictures of houses and you see the heat leeching out. So. Yeah, sorry.

[Adam Fleming]

But to answer Jenny's question in the very precise.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

I'm trying to avoid answering it.

[Adam Fleming]

Well, no, because it's. Well, I mean also you like Off Jam has got hundreds of pages on their website how the energy price cap is calculated. It's not a simple thing. And also the fact is if you look Back at the history of the energy price cap, it was originally a measure to encourage people to shop around for their energy bills and if they hadn't shopped around to get the cheaper deal, it was to protect them from being overcharged. And it's only in the last few years of repeated energy crises that it's become a thing to limit people's bills in a more general population sense. But in terms of the now, the reason it's going down in the next three months is nothing to do with energy markets or energy companies profits. It's because the government has decided to take some of the so called policy costs.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Oh yes.

[Adam Fleming]

That are basically the cost of government policy that comes to you via your electricity or gas bill.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yes.

[Adam Fleming]

The government is taking them off and putting them into general taxation instead. So it's spread out across the population in a more progressive taxi way as opposed to. That's tax, tax esque, not taxi way, tax esque way rather than going directly onto your bill. Jenny, thank you for your question about the price cap. So to sum up where we've got to with what Rachel Reeves said in the comments today, it's a few things. One, the kind of the focus today and the detail was about giving the regulators tools to make sure that there isn't going to be price gouging and taking advantage of the consumer.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

It's mainly a big megaphone.

[Adam Fleming]

Yeah.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

A threat of a stick to tell

[Adam Fleming]

them not to do it.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yeah.

[Adam Fleming]

And then if there is going to be any support for high energy bills in future that will be targeted. And Rachel Reeves will not borrow extra money or certainly not borrow any more extra money to do it. That will bust her fiscal rules. And also this might be a complete phantom because actually there might not be an energy bills crisis in the autumn at all.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yeah, I think the energy bill. Yes, yes. In their best case scenario. But I think it's understandable that people are looking at worst case scenarios and I think if you, if you wonder why it's a reasonable argument, people will argue. We've seen this from different parts of political spectrum, even potentially from an argument within cabinet. Why don't they just borrow the money? Why don't they just smooth every over everybody's bills? Well, we are already seeing the consequences of concerns around where interest rates are going to go. Concerns around the UK being a bit more inflationy than other countries manifest themselves in the cost of government borrowing going up. Now that's real. That will have a fiscal consequence if it sustains. This is exactly the sort of chasing your own tail that they're trying to avoid this year. Indeed. Had we had the same system as last year of constantly assessing the, the borrowing rules.

[Adam Fleming]

Yeah.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

We'd be reporting every day now how your taxes are going to go up.

[Adam Fleming]

Yeah.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

It's quite interesting.

[Adam Fleming]

Yeah. Because the OBR didn't do that in the spring forecast because Rachel Reeves said, no, you're only going to do if

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

they had done that, that right now be like 10 billion tax rides. 10 million again. So you can sort of see like that alternative universe. But you will see anybody that is involved in the housing market, we'll see what's happening with the mortgage market. My colleague Kevin Peachy wrote a very interesting article that's doing very well on our website right now. There has been a significant reduction of the availability of mortgages as they just try and work out what is going on. Just like the bank of England Governor told me. We just have to hold to work out what's going on.

[Adam Fleming]

Yeah. And because the important thing about mortgage companies is, is the rates are not so much based on what the bank of England base rate is. And they announced last week that they were holding that at 3.75%. It's actually more linked to the cost of long term government borrowing because that's basically how the banks get their money for your mortgage.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yeah, that's absolutely right. That, that's the perfect way of explaining it. It gets a bit more complicated with something called swap rates. But we'll just part that for a minute. But essentially that is correct and you can see the consequences of that. Right. So. So the, the average five year, two year fix is up about half a percentage point right now. They can't really price them. So many of the mortgages have been pulled as they try and work out. Now this is really interesting. There is a massive disagreement out there amongst city folk about whether interest rates are good.

[Adam Fleming]

Yeah. This is an interesting subplot from the last day or so.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Very, very interesting. And I feel like I can, I can sort of of. So what it is is this, the markets, the people who bet, bet, who invest in government debt that effectively sets this interest rate, this market rate. They is implied that rates will go up four times it was yesterday morning and now it's two to three times this year, which is a massive turnaround. That's what the markets are assuming. Economists have a different view. The people who sort of just micro go like, look at exactly what each member of this nine member committee tend to do and their arguments they make and many of them not all of them are saying, in fact we should expect a cut. She have this big divergence about what they're going to do. I, I think I'm the one person that's actually spoken to the Governor of the bank of England in the past week. And I certainly got. Well, no, I mean, I mean I know I tried like, it's just like decide for yourself. But you know, he was like, it was almost channeling Theresa May with hold means hold. Right, that's, that's what we say. We don't know what's going on. But then he said something very interesting and I don't think I'm over interpreting this. He said worse, the effect of an interest rate rise, monetary policy isn't going to open the Straits of Hormuz. So interest rate rise isn't going to

[Adam Fleming]

open up the straits.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

The issue here is the straits are gummed up. So if you took that at face value as a signal, you're like, okay, this is not a guy going around with a sort of Arnold Schwarzenegger, a interest rate sort of gun saying I'm going to fire these interest rates off to kind of calm down.

[Adam Fleming]

Because you would only put interest rates up if you thought there was a structural issue with the economy that was pushing prices up for a while. But if it's just a sort of accident of history, that is a war, then actually that's not a permanent thing.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

It could be.

[Adam Fleming]

And so, and actually also if your war is then dampening economic activity, you need to encourage economic activity, which is what you do if you cut interest rates.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

But this just goes to show so you know, there's layers and layers of complexity, uncertainty, total randomness of like what on earth President Trump is going to tweet the reality of the situation, you know, has it is this five day pause? I mean literally, I, I mean you've obviously been talking to your other guests about this. Is the five day pause a pathway towards peace and, and, and conflict stopping in some way? Or is it a five day pause so they can get the Marines to go and invade the, the energy island and seize control, which is obviously a massive escalation. So is it absolute escalation to the levels we've never seen before in our lives, or is it in fact de escalation? That's what, that's the meta level. And then you have everything in between and then you have is interest rates. In fact, they're definitely going up by three times. Oh no, they're going down. I mean, I try and help people navigate through this. But, like, you can see why. And in this. And I think this is really important, with this sheer randomness that we're seeing, accidents do happen. We don't know how some hedge fund, big hedge fund that we'd never heard of suddenly becomes a household name next week because it was positioned a certain way in crude oil.

[Adam Fleming]

Or to go back to your point about energy companies hedging and sort of buying their energy in a way that means that they're not exposed to massive increases in the price. They might have mucked that up totally and they end up going bust.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Yeah. Or they didn't expect that to happen at the same time. Yeah. As there were. You know, normally, these government debt, you know, they do go up and they don't go down, but it's very sort of very, you know, they go up slowly and they come down slowly. To see these random movements, the chances of an accident in the financial markets, you know, it's kind of like. I wouldn't. I wouldn't discount that. And it's probably another reason, sort of why questions we hear. The questions are being raised, particularly in Washington.

[Adam Fleming]

And the definition of a whipsaw, and other than the financial markets, is a saw with a narrow blade and a handle at both ends, used typically by two people.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Of course.

[Adam Fleming]

It's that saw you see.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Oh, I thought it was something cartoons. I thought it was like Indiana Jones whip and like a saw on the end of it, maybe, or something like that.

[Adam Fleming]

That would be a very.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

No, no.

[Adam Fleming]

But that's very inefficient way of chop.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

Chop would accurately reflect the current state of the markets. Yeah, I think that would. You see, that sounds like controlled and organized cooperative.

[Adam Fleming]

Yeah. Because that's one person pushing another person pulling and swapping over.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

I like my version of whipsaw, which is a saw at the end of a whip or like whiplash flailing around.

[Adam Fleming]

Yeah. Because you're thinking of a whiplash, which would be a whip with a saw on the edge.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

You have this thing, though, don't you? The way you have phrases you've used for ages, and you just realized when you're, like, in your 40s that you.

[Adam Fleming]

Reminds me of our favorite episode of Newscaster United, where we discussed whether it was wiggle room or wriggle room. Very little at the moment. It's wiggle. Faisal. Thank you.

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

No worries.

[Adam Fleming]

And that's all for this episode of Newscast. But just to remind you, tickets are still available for Castfest, our big podcasting shindig we're doing at the famous BBC Studios in Maida Vale on the 25th of April, where you will be able to see this podcast and our sister podcast being made with you being part of it. And you can apply for tickets by following the instructions that are in the episode description of this episode of Newscast and I look forward to seeing some of you there. Bye bye Newscast.

[BBC Advertisement Voice]

Newscast from the BBC. Well, thank you for making it to

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

the end of another newscast. You clearly ooze stamina.

[Adam Fleming]

Can I gently encourage you to subscribe to us on BBC Sounds?

[Economics Correspondent (Possibly Sarah O'Connor or similar)]

And then, without having to do anything else, our meandering chat will miraculously make its way to your phone.

[Parham Gohbadi]

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