Morning Brief, Thursday 11 June

The United States launched fresh strikes on Iranian military sites overnight, using cruise missiles against surveillance, communications and air-defence positions, while Washington said it was responding to Iranian actions and Tehran said America had violated the ceasefire. Iran then claimed attacks on US-linked bases in the Gulf and announced a closure of the Strait of Hormuz; US Central Command disputed that claim and said commercial ships were still moving through the waterway. Kuwait and Bahrain reported aerial threats, and Jordan said it destroyed missiles headed toward Azraq, where a US base sits.

Donald Trump hardened his tone from the Oval Office, saying the United States would hit Iran again and arguing that Tehran had delayed signing a deal he described as complete. He also refused to rule out strikes on civilian infrastructure, including power plants and bridges, according to the reports, while Iranian officials accused Washington of using force to wreck diplomacy.

Mediators still moved. Qatar sent a delegation to Tehran, joining Oman and Pakistan in trying to turn a battered truce into something more durable. But the military facts now run ahead of the diplomatic language: both sides still talk about a ceasefire, and both describe the other’s moves as aggression. The Strait of Hormuz is not just a map feature here; it is the pressure valve for oil, inflation and a war that keeps escaping its paperwork.

American inflation accelerated to 4.2% in May, the fastest pace in three years, as energy costs did most of the damage. Core inflation rose to 2.9%, gasoline jumped 7% on the month, and energy accounted for more than 60% of the monthly CPI increase. The figures landed awkwardly for Donald Trump, who promised cheaper prices and is now asking voters to blame a war whose oil shock has spread through fuel, shipping and groceries.

The pain is not staying in America. BBVA Research lifted its Spanish inflation forecast to 3.8% for 2026 and warned that expensive energy, raw materials and logistics would shave growth. Germany’s DIW halved its 2026 growth forecast to 0.5% and warned that the economy could slip into a technical recession by summer, although it said secure supplies and lower fossil dependence make this shock less severe than 2022–2023.

Central banks now face a nasty trade-off. The Federal Reserve must judge whether oil-driven inflation needs tighter policy, while the European Central Bank confronts slower growth and sticky prices at the same time. Governments, meanwhile, reach for rebates, commuter help and targeted support, but broad fuel subsidies burn cash and often reward the biggest users. Inflation is again becoming a foreign-policy bill, and households are being asked to pay it before diplomats have finished arguing over the invoice.

Belfast police and emergency services tried to restore order after a knife attack in north Belfast triggered two nights of anti-migrant violence. Hadi Alodid, a 30-year-old Sudanese refugee, appeared in court charged with attempted murder after Stephen Ogilvy was stabbed repeatedly and suffered severe injuries, including the loss of his left eye. A graphic video of the attack spread online, and crowds later set fire to homes, cars, bins and a bus while officers moved migrant families out of threatened properties.

Authorities treated the original stabbing as a grave criminal case, not terrorism, but the riots quickly became political theatre. Protesters targeted housing linked to asylum seekers, masked men stopped some health workers, and public transport operators suspended services early amid fears of more disorder. Businesses shut, schools reported lower attendance among newcomer pupils, and police warned that immigrant addresses were being shared online to incite further action.

The victim’s family called for peaceful protest and said many migrants make a valuable contribution to society. That plea matters because Belfast knows how quickly street violence acquires symbols, slogans and old grudges. The immediate test is policing, but the larger one is whether Northern Ireland can punish one alleged attacker without licensing collective revenge against people who had nothing to do with the crime.

SpaceX is preparing to raise $75bn in what would be the largest initial public offering on record, selling roughly 555.6m shares at $135 each and targeting a valuation around $1.77trn. Demand is reportedly more than four times the available stock, and the listing could create more than 4,400 employee millionaires, including hundreds whose stakes may exceed $100m. For welders, cooks and engineers who received options at far lower prices, the listing turns years of private-company patience into public-market paper wealth.

The valuation asks investors to buy a story as much as a balance sheet. SpaceX reported $18.7bn of 2025 revenue and a $4.9bn net loss, with Starlink supplying most sales while rockets, space infrastructure plans and newly folded-in AI ambitions consume cash. The proposed multiple exceeds 90 times last year’s revenue, far above Nvidia and Apple, but supporters point to launch dominance, military dependence and more than 10m Starlink customers.

The offer will also test how index providers handle a company that could become too large to ignore almost immediately. Elon Musk’s control, governance worries and the difficulty of valuing lunar bases or orbital data centres will not deter everyone, but they should slow the applause. SpaceX has proved it can make rockets reusable; now Wall Street must decide whether awe is a valuation method.

Anthropic released Claude Fable 5, the first public version of its powerful Mythos model family, while trying to keep the sharpest edges out of ordinary users’ hands. The system uses the full model for standard prompts but reroutes sensitive sessions, including cybersecurity, biology and chemistry, to the weaker Claude Opus 4.8. Anthropic says that happens in about 5% of sessions, though early users say the tripwire fires easily.

The reason for caution is plain. Mythos 5 scored 78% on ExploitBench, compared with 40% for Opus 4.8 and 69% for an earlier Mythos preview, and Anthropic has also made an unrestricted version available to selected government and critical-infrastructure partners. Microsoft is limiting employee access because Fable 5 requires 30-day retention of prompts and outputs for safety classifiers, with policy-flagged data kept for up to two years. European cybersecurity regulators have not yet accessed the model because terms remain unsettled.

The timing sharpened criticism. Anthropic had just published an argument for slowing or pausing frontier AI development, then shipped its most powerful public model five days later. Emily M. Bender put the suspicion crisply: alarm can market capability. A chatbot that can find software holes but must pretend not to hear certain questions now faces the oldest technology test: whether the guardrails are safety engineering, sales packaging, or both.

Japan’s Meteorological Agency declared El Niño conditions on June 10, becoming the first major weather body to do so, while other forecasters moved in the same direction. NOAA put the chance of emergence this month at 82%, the World Meteorological Organization saw an 80% probability between June and August, and it gave at least a 90% chance that the episode persists until November. Copernicus said model forecasts rose sharply between May 1 and June 1.

The worry comes from unusually warm waters in the central and eastern equatorial Pacific and from atmospheric signals that are starting to line up, including weaker trade winds and altered rainfall patterns. Some models project warming of 2.5C to 4C in the key region, above the threshold normally used for a super El Niño. Honduras has already warned that 75 municipalities could face severe drought, while other regions face higher flood risks.

El Niño is natural variability, but it now rides on a hotter base created by greenhouse-gas emissions. That makes old comparisons less comforting. The 1982–1983, 1997–1998 and 2015–2016 events brought droughts, floods and crop failures; this one could arrive in a world already short of spare climate capacity. The weather pattern begins in the Pacific, but its bill is likely to travel by food prices, power shortages and emergency budgets.