The Rest Is Money — Episode 259 (BONUS): "Trump’s War – Why It's Making Us Poorer"

Date: March 10, 2026
Hosts: Robert Peston & Steph McGovern

Episode Overview

In this urgent bonus episode, Robert Peston and Steph McGovern unpack the rapid economic fallout from the ongoing Iran war—dubbed “Trump’s War”—and how its volatility is directly impacting inflation, global energy, shipping, and the everyday finances of ordinary people. The hosts analyze Trump’s market-moving comments, disruptions to oil and gas supply routes, and the knock-on effects for everything from mortgages to global supply chains. They also highlight the immense uncertainty that still surrounds the conflict's resolution.

Key Discussion Points & Insights

1. Market Chaos & Trump's Volatility (00:20–06:40)

• Oil Market Turmoil:
  • Brent crude spiked to $120/barrel—a massive 20% surge—before plummeting $30 following a vague Trump statement about the war being "almost complete." Final price stabilized around $90, still 50% up from pre-war levels.
  • Quote:
    • "There were some extreme months during the global financial crisis. And yesterday quite a lot of that sort of just feeling of chaos and mayhem just came flooding back." —Robert [01:09]
    • "All I'm hearing from them is taco, taco, taco. You know, Trump always chickens out." —Robert [00:00, 04:56]
• Bond Market Volatility:
  • UK gilt yields (short-term borrowing costs) surged by 20 basis points in a single day; a major swing indicating higher government borrowing costs.
• Investor Nervousness:
  • Markets react sharply to Trump’s ambiguous messaging—especially when suggesting imminent de-escalation or possible U-turns on policy.
• "Taco moment":
  • Trump’s tendency to backtrack ("chicken out") when political and economic backlash hits, causing sudden market reversals.

2. The Choke Points in Global Energy & Shipping (06:40–15:43)

• Strait of Hormuz Crisis:
  • 15–20% of worldwide crude oil and gas flows disrupted/suspended as producers struggle to reroute supplies.
  • Quote:
    • "I think it's something like between 15 and 20% of global crude oil and gas supplies have been disrupted or suspended as these producers struggle to reroute the flows." —Steph [06:50]
• Attacks & Electronic Warfare:
  • Ongoing attacks on ships, GPS jamming, and major facilities being hit have created chaos, confirmed even in daily life by locals.
  • Houthis' Red Sea Threat:
    • Shipping through the Red Sea is threatened by Iran-aligned Houthis in Yemen, forcing companies like Maersk to reroute around the Cape of Good Hope, adding about $3 million per ship (10 days longer).
• Alternative Pipelines:
  • Saudi East-West Pipeline: Can move 5 million barrels/day, a quarter of Hormuz’s 20 million.
  • UAE's Gulf of Oman Pipeline: 1.5 million barrels/day capacity, limited impact against scale of disruption.
• Insurance Crisis:
  • Trump’s emergency $20 billion insurance fund for shippers (after private insurers withdrew), but security risks persist, limiting effectiveness.

3. LNG & Wider Supply Chain Impact (12:13–18:46)

• Gas Disruption:
  • Qatari LNG (key for Europe/UK) bottlenecked—almost no gas passing through Hormuz.
  • Downstream Impacts:
    • Risk of sharp increases in UK/European energy bills in upcoming months.
    • Quote:
      • "There does seem to be quite a big risk that the next resetting of the price that we pay for power...will go up really quite a lot for British consumers and British businesses." —Robert [14:18]
• Force Majeure in Action:
  • Companies (Qatar Energy, Kuwait Petroleum, South Korea's Yachin NCC) declare force majeure on contracts—cannot deliver, so obligations are suspended.
  • Knock-on Sectors:
    • Semiconductors (Qatar supplies 40% of global helium)
    • Fertilizers and agricultural chemicals (impacts global food prices)
    • Construction (specialist materials shortages)

4. Inflation, Interest Rates, & Personal Finance Fallout (19:23–24:05)

• Expectations Upended:
  • Pre-war: Markets expected cuts in UK interest rates this year.
  • Post-war: Expectation is now for zero rate cuts in 2026, a major shift affecting anyone borrowing or renewing loans.
  • Overnight Interest Swaps (OIS): Sharp repricing in financial instruments indicates higher-for-longer interest rates.
• Mortgages & Daily Life:
  • Steph shares her own mortgage rate rising from 3.64% to 3.89% in just a few days—a personal anecdote illustrating rapid change.
  • Quote:
    • "I hate the fact when you're making a decision on your mortgage, you're basically taking a gamble on what is going to happen in the world." —Steph [22:59]
• Banks Reprice Offers:
  • Two- and five-year fixed rates rise as banks re-evaluate risk amid tumult.

5. The Persistent Uncertainty (24:05–28:46)

• Trump's Inconsistent Messaging:
  • Trump publicly hints at ending the war and even possibly easing sanctions on Russia to get more oil on the market—raising wider security and diplomatic questions.
  • Quote:
    • "He had a long conversation with Vladimir Putin earlier in the day, the Russian dictator. Right. And he then says...he's thinking of easing sanctions." —Robert [25:23]
• Unpredictable Timelines:
  • Trump admits the war may not end this week; further days of destruction likely. Markets remain highly volatile.
• Bigger Questions:
  • Will an end to this conflict improve broader security? Or will it be a temporary pause while threats rebuild?
  • Economic consequences—lower growth, higher inflation, and reduced living standards—are already baked in.

Notable Quotes & Moments

• "All I'm hearing from them is taco, taco, taco. You know, Trump always chickens out." —Robert [00:00]
• "We always thought that...a rise in gasoline price...is always so politically unpopular that he would do a U-turn..." —Robert [05:25]
• "GPS being jammed...when they go out for a run...it's now showing that they've done like 5,000 kilometers." —Steph [07:52]
• "Qatar produces about 40% of the world's helium, which is critical for making these chips." —Steph [15:27]
• "The supply chain is absolutely crucial to everything." —Steph [18:14]
• "We were confident before the war started that inflation was on a downward track... This war has given everything a jolt upwards." —Robert [20:44]
• "Even if it [the pipelines] does all work...we can assume that the oil price would stabilize still at a...much higher [level]." —Robert [12:18]
• "All the big banks have been repricing their mortgage offers." —Robert [24:05]

Key Timestamps

| Timestamp | Segment/Topic | |-----------|------------------------------------------------------| | 00:20 | Episode open—oil price and market panic | | 01:06 | Historic comparison to 2007/8 financial crisis | | 04:56 | "Taco/Trump chickens out"—U-turn impact on markets | | 06:40 | Shipping routes under threat, rerouting, Red Sea | | 09:56 | Houthi threat and Red Sea shipping disruptions | | 11:24 | UAE pipeline & massive tanker rerouting | | 12:13 | Limited effectiveness of alternatives; gas crisis | | 15:43 | Global impacts—force majeure across industries | | 19:23 | Inflation, interest rates, and personal financial hit | | 22:29 | Steph’s mortgage anecdote | | 25:23 | Trump’s sanctions comment & overall uncertainty | | 28:31 | Upcoming interview tease: Mohamed El Erian |

Tone & Style

• Conversational, relatable (sharing personal stories about mortgages)
• Analytical and clear-eyed, occasionally wry or ironic (e.g., "taco" catchphrase for Trump's U-turns)
• Rapid, responsive—the hosts are actively tracking events as they unfold

Conclusion

Robert and Steph provide a grounded yet urgent account of how Trump’s conduct and the Iran war are driving economic shocks—raising oil and gas prices, snarling global supply chains, and scrambling personal finances for millions. The episode underlines the unpredictability still hanging over markets, making this a must-listen for anyone worried about where inflation, interest rates, and their own costs are headed next.

Looking Ahead

They promise continued analysis and a forthcoming special episode with Mohamed El Erian for deeper insights as the crisis evolves.