Key Points from the Week:
Escalating tensions in the Middle East unsettled global markets last week, driving a sharp rally in oil prices and prompting investors to rethink expectations for near-term monetary easing. UK equities recorded their steepest weekly decline in almost a year, gilt yields climbed, and sterling weakened as capital flowed into safe‑haven assets. Policymakers cautioned that rising energy costs could hinder recent progress on inflation, complicating the Bank of England’s policy outlook and raising doubts over the resilience of the UK’s modest economic recovery.
Despite the volatile macro backdrop, activity in Financial Services remained buoyant. Strategic investments continued to target capital-markets technology and FinTech infrastructure, while consolidation momentum persisted across the Wealth and Advisory segments with developments such as Shackleton’s prospective acquisition of Hurst Point and ongoing expansion by 7IM. In the Insurance sector, Zurich Insurance Group’s agreed £8.1 billion takeover of Beazley highlighted the continued drive for scale and structural realignment within global specialty markets.
Welcome to HSA Advisory’s Financial Services Newsletter, your concise roundup of UK macroeconomic developments and financial services transactions.
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UK Macroeconomics
9 March 2026: Middle East crisis likely to push UK inflation higher, Reeves warns
– Chancellor Rachel Reeves warned that escalating conflict involving Iran could place upward pressure on UK inflation, as rising oil and energy prices risk feeding through to household costs and broader consumer prices
– Surging energy markets are already affecting global economic expectations, with oil price volatility raising fears that earlier progress in reducing inflation could stall if supply disruptions continue
– Reeves said the government is monitoring fuel markets closely and urged regulators to ensure retailers do not exploit the crisis by raising prices excessively
– Economists warn prolonged geopolitical tension could damage the UK’s fragile economic recovery, as higher energy costs would weigh on growth while simultaneously complicating the Bank of England’s inflation outlook
9 March 2026: FTSE claws back losses as G7 pledges to curb oil surge
– UK equities partially recovered after earlier sharp declines as investors responded to signals from G7 finance ministers that coordinated action could be taken to stabilise global energy markets
– The group indicated it stands ready to release emergency oil reserves if supply disruptions worsen, aiming to calm markets after the Iran conflict pushed crude prices sharply higher
– The prospect of coordinated intervention helped ease fears of an immediate inflation spike, allowing the FTSE to regain some ground following heavy losses earlier in the week
– Analysts cautioned that market volatility is likely to persist while the conflict continues, as energy prices remain a key driver of inflation expectations and global investor sentiment
9 March 2026: Investors reverse bets on central bank rate cuts as oil crisis deepens
– Investors have rapidly scaled back expectations for interest rate cuts as the Iran conflict drives a surge in oil and gas prices, raising fears that a renewed energy shock could push inflation higher across major economies
– Bond markets have sold off sharply as traders reassess monetary policy outlooks, pushing yields higher and reducing bets on near-term easing from central banks including the Bank of England, Federal Reserve and European Central Bank
– Policymakers remain cautious after the inflation surge triggered by Russia’s invasion of Ukraine, with many determined not to repeat earlier delays in tightening policy during an energy-driven price shock
– Analysts warn that persistently high energy prices could derail easing cycles globally, forcing central banks to keep borrowing costs elevated even as economic growth slows and recession risks increase
9 March 2026: Pimco sticks with bet on gilts despite market slump
– Pimco has reaffirmed its positive stance on UK government bonds despite the recent sell-off, arguing that current market weakness offers attractive entry points for investors seeking long-term value in sovereign debt
– The gilt market has come under renewed pressure as oil prices hover around one hundred dollars a barrel, raising fears that higher energy costs could reignite inflation and delay monetary easing
– Investors have pushed yields higher as expectations for near-term Bank of England rate cuts weakened, reflecting concerns that geopolitical tensions may prolong restrictive financial conditions
– Pimco analysts contend that once energy-driven inflation risks stabilise, gilts could regain appeal due to slowing economic growth and the likelihood that policy rates will eventually decline
6 March 2026: Bank of England scrutinises lenders’ exposure to collapsed mortgage provider Market Financial Solutions
– The Bank of England has begun questioning major lenders about their exposure to collapsed mortgage provider Market Financial Solutions, seeking clarity on potential financial links and risks to the broader banking system
– Authorities are reportedly focusing on banks including Barclays, examining whether funding arrangements or financial transactions with the lender could create losses or instability within the UK financial sector
– Regulators are acting cautiously to ensure that the failure of the specialist mortgage provider does not trigger wider contagion risks across lending markets or undermine confidence in financial institutions
– Analysts say the review reflects heightened regulatory vigilance following recent market volatility, with supervisors keen to ensure banks maintain sufficient capital buffers and risk controls when dealing with non-bank lenders
6 March 2026: Sterling pulls back as Iran war drives investors toward safe havens
– The British pound declined for a second consecutive session as escalating conflict involving Iran unsettled financial markets, prompting investors to shift capital toward traditional safe-haven assets such as the US dollar and government bonds
– Earlier in the week sterling had already fallen to a three-month low as surging oil prices revived fears that higher energy costs could slow progress in reducing inflation across advanced economies
– Traders have scaled back expectations for near-term Bank of England rate cuts, concerned that energy-driven inflation could force policymakers to maintain tighter monetary policy for longer than previously anticipated
– Analysts say sterling may remain volatile while geopolitical tensions persist, with currency markets closely watching energy prices, inflation indicators and central bank guidance for clearer signals on the UK’s monetary policy outlook
6 March 2026: Gilts sell off sharply on fears of inflation from Iran war
– UK government bonds fell sharply as escalating conflict involving Iran pushed oil and gas prices higher, raising fears of a renewed energy-driven inflation shock that could reverse recent progress in bringing price pressures under control
– The sell-off drove gilt yields significantly higher across maturities, reflecting investors’ reassessment of inflation risks and concerns that central banks may need to keep interest rates elevated for longer than previously expected
– Market expectations for Bank of England rate cuts weakened sharply, with traders cutting bets on near-term easing as energy costs threatened to feed through to consumer prices and broader inflation dynamics
– Analysts warn the UK may be particularly vulnerable to energy-driven inflation because of earlier assumptions of rapid monetary easing and the economy’s exposure to global energy price shocks
5 March 2026: Starmer says UK’s relationship with US still ‘special’ after Trump criticism
– Prime Minister Keir Starmer insisted the UK-US “special relationship” remains intact despite public criticism from Donald Trump over Britain’s initial reluctance to support U.S. strikes on Iran
– Starmer emphasised that military and intelligence cooperation between the two countries continues daily, including joint operations and shared intelligence aimed at protecting British and American personnel in the region
– The dispute emerged after Trump criticised Starmer for delaying permission for U.S. forces to use British bases during the early phase of the Iran conflict, questioning the strength of the bilateral alliance
– Starmer defended his cautious stance, saying decisions about military involvement must prioritise British interests and legal considerations while maintaining close cooperation with allies
5 March 2026: UK firms’ wage growth expectations remain near four-year low
– A Bank of England survey showed employers’ expectations for wage growth remained close to their lowest level in almost four years during February, suggesting labour cost pressures may be easing after a prolonged period of strong pay increases
– The findings reinforce signs that the UK labour market is gradually cooling, as businesses adjust hiring and compensation plans in response to slower economic growth and higher borrowing costs
– Policymakers are closely monitoring wage expectations because persistent pay growth can sustain services inflation, potentially complicating efforts to bring overall price pressures back to the central bank’s target
– Economists say sustained moderation in wage expectations would strengthen the case for future interest rate cuts, though the Bank of England will seek confirmation across multiple labour market indicators before easing policy
4 March 2026: Unemployment now higher in UK than in Italy
– Latest labour market data shows the UK’s unemployment rate has risen above Italy’s, reversing a long-standing trend where Britain typically maintained stronger employment performance than many European peers
– Economists warn the shift signals weakening labour market flexibility, historically one of the UK’s key economic strengths, which helped absorb shocks and support faster job creation during downturns
– Analysts point to slowing hiring, higher employment costs and subdued business confidence as factors contributing to rising unemployment and weaker labour demand across several sectors
– The development raises concerns about the UK’s growth model, as a less dynamic labour market could limit productivity gains, suppress wage growth and weaken the broader economic recovery
4 March 2026: Reeves faces hazardous fiscal picture even without Iran war
– The UK’s fiscal outlook remains fragile despite the government’s emphasis on stability, with new forecasts showing limited room for policy manoeuvre even before factoring in the economic effects of the Iran conflict
– Analysts highlight structural pressures including weaker migration flows, which reduce workforce growth and tax revenues, making it harder for the Treasury to sustain public finances while maintaining fiscal rules
– Rising defence spending linked to geopolitical tensions is also expected to increase budgetary strain, forcing difficult trade-offs between security commitments and domestic spending priorities
– Economists warn that sluggish productivity growth and expanding welfare and education costs are compounding the challenge, leaving the chancellor with limited flexibility to respond to future economic shocks
4 March 2026: UK economy expands in February but cost pressures challenge BoE
– UK business activity expanded during February, driven largely by stronger performance in the services sector, suggesting the economy maintained modest momentum despite broader uncertainty surrounding growth and global geopolitical developments
– Survey data indicated that companies continued to face elevated input costs, highlighting persistent price pressures that could complicate the Bank of England’s efforts to bring inflation fully back to target
– Firms also reported continued job reductions as businesses sought to control expenses and improve efficiency, signalling that labour market conditions may be gradually weakening even as overall activity expands
– Economists warn that the combination of growth and stubborn cost pressures creates a policy dilemma, as the Bank of England must balance supporting economic momentum with preventing inflation from becoming entrenched
4 March 2026: FCA promises update on model portfolio service review later this year
– The Financial Conduct Authority said it will provide an update later this year on its ongoing review of model portfolio service providers, as regulators examine whether investors are receiving fair outcomes under the Consumer Duty framework
– The review follows rapid growth in the MPS market, where advisers increasingly outsource investment management through pre-built portfolios typically composed of funds and managed by asset managers
– Regulators are assessing how firms oversee conflicts of interest, governance arrangements and client outcomes to ensure the expanding sector operates transparently and aligns with consumer protection rules
– The FCA has offered limited public detail on the review’s progress so far, but confirmed work is continuing and further findings or guidance will be published once the assessment advances later this year
4 March 2026: Reeves says UK fiscal headroom has increased since November
– Chancellor Rachel Reeves said updated forecasts show the government now has slightly greater fiscal headroom to meet its main debt rule, reflecting improved projections for borrowing and economic performance over the medium term
– New estimates from the Office for Budget Responsibility suggest the margin for meeting fiscal targets has widened compared with forecasts released during the Autumn Budget, offering the Treasury additional room to manage future economic shocks
– Reeves framed the development as evidence that the government’s fiscal strategy is restoring credibility with investors and stabilising the public finances after a period of elevated borrowing and economic uncertainty
– Economists caution that the improvement remains relatively modest and could quickly narrow if growth disappoints or spending pressures increase, meaning fiscal discipline will remain central to maintaining market confidence
3 March 2026: UK inflation seen at 2.3% in 2026 as grocery price pressures resurface
– Chancellor Rachel Reeves said official forecasts indicate UK consumer price inflation will average about 2.3% next year, suggesting continued progress toward restoring price stability following the sharp inflation surge experienced earlier in the decade
– Projections from the Office for Budget Responsibility indicate price pressures should ease as energy costs stabilise, supply disruptions fade and the effects of earlier interest rate increases continue feeding through the wider economy
– However, recent data shows UK grocery inflation rising again to 4.3% in the latest four-week period, highlighting persistent cost pressures for households despite broader signs that overall inflation is moderating
– Economists warn that continued increases in food prices could undermine consumer confidence and complicate the Bank of England’s inflation outlook, particularly if grocery costs feed into wage demands and broader expectations for future price growth
3 March 2026: OBR warns UK economy could face ‘very significant’ hit from Iran war
– The Office for Budget Responsibility warned the escalating Iran conflict could have a very significant impact on the UK economy, as surging energy prices and market volatility threaten growth prospects and increase uncertainty surrounding the economic outlook
– The fiscal watchdog downgraded its UK growth forecast for the coming year, highlighting weaker economic momentum even before accounting fully for the impact of the Middle East conflict and rising global energy costs
– Chancellor Rachel Reeves emphasised the stability of Britain’s public finances, noting that fiscal headroom against government borrowing rules has increased slightly since the Autumn Budget, providing a modest buffer against potential economic shocks
– Financial markets reacted nervously to geopolitical tensions, with gilt yields rising as investors scaled back expectations for Bank of England rate cuts following the surge in oil prices and inflation concerns
3 March 2026: Reeves sticks to ‘stability’ in face of Iran war and restive Labour MPs
– Chancellor Rachel Reeves delivered a short Spring forecast speech focused heavily on projecting economic stability, aiming to reassure both investors and voters that the government’s fiscal strategy remains credible despite rising geopolitical tensions
– The address avoided new policy announcements, instead emphasising continuity, disciplined borrowing and predictable economic management as the central pillars of the government’s approach during an increasingly uncertain global environment
– Reeves also used the speech to send a message to uneasy Labour MPs, warning that internal political instability or a sharp shift toward heavier borrowing could undermine economic progress and damage market confidence
– The strategy reflects the Treasury’s attempt to position Labour as a credible steward of the economy, though critics argue the absence of new measures risks appearing complacent amid weak growth and rising unemployment concerns
UK Financial Services Key Transactions
9 March 2026: Shackleton in exclusive talks to buy £10bn AUM Hurst Point
– Wealth manager Shackleton is reportedly in exclusive discussions to acquire Hurst Point, the private equity-backed advice and discretionary fund management group overseeing around £10 billion in assets. The potential deal follows Hurst Point’s search for a buyer since late last year and highlights continued consolidation in the UK wealth-management sector
9 March 2026: Adaptive secures strategic investment from Citi and HSBC
– Capital-markets technology firm Adaptive has received strategic investment from Citi and HSBC to accelerate growth and product innovation across its trading-technology platform. The funding strengthens collaboration with major banks and supports development of next-generation electronic trading infrastructure as demand rises for high-performance, bespoke capital-markets systems
6 March 2026: Saba confirms 35% discount offer for gated Blue Owl investors
– Saba Capital has launched a tender offer to purchase up to 6.9% of shares in the gated Blue Owl OBDC II fund at a 35% discount to net asset value. The move provides limited liquidity for investors facing redemption restrictions and highlights growing secondary-market activity in private credit vehicles experiencing liquidity constraints
5 March 2026: Aviva unveils wealth push as platform flows reach £4.6bn in 2025
– Aviva has stepped up its wealth strategy after reporting £4.6 billion of platform net inflows in 2025, underscoring strong adviser demand and growing momentum in its wealth division. The insurer is expanding platform capabilities and advice distribution as it targets further growth in the UK wealth market, where rising pension savings and investment demand are driving structural expansion
5 March 2026: QFEX launches with $9.5m seed round to disrupt global trading
– Trading infrastructure startup QFEX has launched after raising $9.5 million in seed funding led by General Catalyst with participation from Y Combinator, reaching a valuation of about $95 million. The platform enables 24/7 trading of traditional assets and introduces perpetual futures without expiry, aiming to challenge traditional exchange, clearing and brokerage systems
5 March 2026: Wealthyhood raises €6m from Bank of Cyprus for EU growth
– WealthTech app Wealthyhood has raised €6 million in funding led by Bank of Cyprus, with participation from Genesis Ventures, to accelerate European expansion and enhance AI-driven investing features. The round also establishes a strategic partnership with the bank, supporting Wealthyhood’s plan to scale its platform for both retail users and financial institutions across Europe
5 March 2026: Saba takes stake in £1.8bn Allianz Technology Trust
– Activist hedge fund Saba Capital has taken a stake in the £1.8 billion Allianz Technology Trust, which despite strong long-term performance still trades at a roughly 9.8% discount to net asset value. The move signals potential activist pressure to address the discount through measures such as buybacks, structural changes or enhanced shareholder returns
5 March 2026: AJ Bell expands gilt MPS with maturities running until 2032
– AJ Bell has expanded its gilt-focused model portfolio service with new strategies featuring maturities extending to 2032. The launches reflect growing adviser demand for gilts as tax-efficient planning tools, capitalising on the exemption of gilt capital gains from UK tax while offering predictable income and duration management within client portfolios
4 March 2026: RegTech firm Vivox AI secures £1.3m funding
– RegTech startup Vivox AI has raised £1.3 million in its first funding round to expand its AI-driven compliance platform for regulated financial institutions. The capital will support development of “atomic” AI agents for AML, KYC and KYB processes, helping automate financial-crime workflows while maintaining auditability and regulatory oversight
3 March 2026: Zurich seals £8.1bn Beazley takeover and outlines specialty growth strategy
– Zurich Insurance Group has agreed an £8.1 billion all-cash takeover of London-based specialty insurer Beazley, offering about 1,310p per share plus a dividend – roughly a 60% premium to the pre-offer price. The deal will create a global specialty platform with around $15 billion in gross written premiums, combining Zurich’s distribution scale with Beazley’s Lloyd’s expertise to expand in high-growth segments including cyber, infrastructure and technology risks
3 March 2026: Payr raises $2.1m seed to modernise UK rent payments
– London-based fintech Payr has secured $2.1 million in seed funding to enable tenants to pay rent using credit cards while landlords continue receiving funds via standard bank transfers. The platform aims to modernise payment infrastructure in the UK’s £122.9 billion rental market, with the funding supporting product development, integrations and distribution partnerships across the property ecosystem
3 March 2026: 7IM buys £1bn advice group for new restricted arm
– 7IM has acquired a financial planning and discretionary fund management firm overseeing more than £1 billion in assets, integrating the business into its newly created restricted advice arm. The deal strengthens 7IM’s distribution network and supports its strategy to scale advisory capabilities while expanding access to its in-house investment solutions
A Word from Our Founder & Managing Director
The past week has shown how quickly geopolitical shocks can reset market assumptions. As investors positioned for a gradual easing cycle, renewed energy price pressures have revived inflation risks and forced a rethink on the path of interest rates. At the same time, the Financial Services industry continues to display structural resilience: consolidation in Wealth Management, sustained investment in trading infrastructure and accelerating FinTech innovation all point to institutions preparing for an extended period of volatility rather than a rapid return to macro stability. At HSA Advisory, we are focused on helping clients navigate this environment with clarity, agility and senior-led judgement. Whether you are pursuing cross-border growth, assessing acquisitions or planning a capital raise, our goal is to help you convert uncertainty into strategic advantage.
Himanshu Singh, Founder & Managing DirectorPulse Check
If energy-driven inflation persists, will central banks delay rate cuts long enough to meaningfully slow the UK’s fragile economic recovery?
We’d love to hear your thoughts.
Source: Financial Times, Reuters, The Times, Insurance Times, Insurance Business UK, The Guardian, Insurance Age, CityWire, FinTech Global.
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