The squabbling between the US and Iran over the baseline for a resolution to the war is now becoming the new normal. Investors are largely shrugging off the latest skirmishes and accusations from both sides that their proposals fall far short of expectations.

London’s FTSE 100 has opened higher at the start of the week, helped by another rise in the share prices of energy companies, which remain the big beneficiaries of the conflict. As hopes have been dashed again for some kind of diplomatic breakthrough, oil prices have risen again. Brent crude broke through the $105 a barrel mark, as the prospects of a longer energy crunch increase. While there’s some expectation that a major reignition of the war is less likely, given the US claims a ceasefire is still in place, severe supply constraints of commodities are set to continue with the Strait of Hormuz impassable. With the crisis now into the eleventh week, consumers, companies and countries are having to adapt to a world of constrained supplies.

The war has already severely disrupted travel plans around the world, with Heathrow airport reporting its passenger numbers fell by 5.3% in April compared to last year. The global hub suffered from flight cancellations and re-routing but also travellers have become more nervous about booking big trips away. The airport is counting on this being a short-term disruption, but with jet fuel issues becoming a headache for countries around the world, it could turn into a medium-term problem, especially if more holidaymakers delay booking trips. However, there is clearly an underlying desire to travel, with April still the busiest week this year, despite the disruption. Given recent globe-trotting trends, a rebound in bookings is expected but it will depend on when a longer-term resolution can be achieved, and crucially how long it could take to reopen the Strait of Hormuz. Friday’s interim statement from British Airways owner IAG illustrated that the urge to travel was super-strong in the first quarter of the year with a surge in passenger numbers. Shares have lifted again today, in the hope that the Iran war fallout will be more temporary.

With the political dust settling on another weekend of upheaval for British politics, the Prime Minister Keir Starmer is attempting to draw a shaky line under his party’s losses. He’s aiming for a reset in a speech which is expected to focus on his efforts to tackle Britain’s big challenges. The problem is, the war in the Middle East has made this even harder, given the fresh inflationary challenges it has thrown up, which are constraining the government’s spending power. Now, a closely watched economic forecast from the EY Item Club is forecasting that 163,000 jobs are likely to be lost this year, with manufacturing, construction and retail hit particularly hard by the fallout from the war. Energy-hungry industries such as manufacturing and construction are expected to be particularly badly hit due to rising costs, while retail, accommodation and hospitality are expected to suffer as household incomes are battered by rising bills. Amid this outlook, it’s going to be hard for the government to cut through and deliver policies which will make an immediate difference to households. However arguably many of Keir Starmer’s problems lie with perception and his powers of political persuasion, and it may be hard to teach given that old habits die hard.

Catering giant, Compass Group has whetted the appetite for investors given its latest numbers show the business has hit on a winning recipe to attract new business, helping lift guidance for the full year. The company is demonstrating why large-scale outsourcing appears to be a resilient long-term trend. With organic growth of 7.2% and client retention up at 96%, it’s a very reassuring set of figures, indicating that current customers are staying loyal to the group, and new business is in the pipeline despite the uncertain economic backdrop. While other companies have flagged a clouded outlook ahead, Compass is expecting trading to be robust in the second half of the year, with its deep procurement systems helping it stay resilient. There are also signs the company is becoming more efficient as it grows, with underlying operating profit growth of 12%, outpacing revenue growth. Recent acquisitions have helped, and savings are feeding through to the bottom line. But there’s also a focus in this update on using AI tools to operate more effectively as it grows which appears to be reaping significant rewards.

As regulations become more complex, including the need for catering providers to be transparent with allergy information, it appears many outlets want help in tracking ingredients through supply chains, and Compass can offer that support at scale. It’s positioning itself as a reliable partner and reckons its addressable market could grow to around $600 billion by 2035. But as always there will be risks ahead, especially if a longer-term higher inflation environment persists, which could have an impact on profitability down the line. For now, though, Compass appears resilient, especially given how diversified its customer base is.