The oil price is sliding today, on relief that Israel’s attack on Iran last weekend avoided striking energy facilities.
Brent crude has sunk by over 4% this morning, dropping as low as $72 per barrel at one point, its weakest since 1 October – the day that Iran launched its large missile attack on Israel.
Oil is selling off, despite initial fears that Israel’s direct, retaliatory, airstrikes against military targets in Iran on Saturday morning could bring the Middle East closer to a full-scale regional war. The Israeli air force struck about 20 military bases across Iran, including missile and drone manufacturing sites and air defence systems.
Traders, it seems, are relieved that Israel avoided hitting Iranian oil production facilities, which would have removed some supplies from the market.
Iran’s president, Masoud Pezeshkian, said yesterday that Tehran was not looking for a war but would respond “appropriately” to Israel’s strikes.
”The fact Iran hasn’t vowed to respond is “a clear sign of de-escalation – or at least not a re-escalation – of the tensions in the region”, says Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, adding: "As such, the geopolitical tensions that were keeping the oil bulls on alert near the $70 per barrel level has gone up in smoke."
UK business confidence has dipped to a four-month low in October, a new survey has shown.
Firms are less optimistic about their own trading prospects, and wider economic optimism, according to the latest Lloyds Business Barometer.
The net balance of optimism towards the economy slipped three points to 35%, the lowest since March, Lloyds reports. In October, 55% of businesses felt more confident about the economy than three months ago (down from 57%), while 20% were less positive (up from 19%).
Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said: “Although overall business confidence dipped in October, it follows a sustained period of significant optimism, and business sentiment remains above historical levels. Encouragingly, many businesses remain confident in their own trading prospects, and the increase in hiring intentions suggests more employers want to grow their workforce.
“Businesses’ broader economic outlook continues to reflect this rounded picture, and as they move into the final part of the year, they will look to manage these considerations effectively.”
This is the latest in a string of surveys showing a drop in consumer and business morale in recent weeks, as the government has signalled that this week’s budget will be a tough affair.
Keir Starmer is expected to talk about “the harsh light of fiscal reality” in a speech today, and the need to run towards “tough decisions”.
The agenda
• 11am BST: CBI distributive trades survey of UK retail sector
• 1.30pm BST: US Dallas Fed Manufacturing Index
We’ll be tracking all the main events throughout the day ...
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The long-awaited budget needs to show Labour knows what to do with power 
