Britain’s small and medium-sized businesses are bracing for one of the most punishing periods since the pandemic, as the fallout from the Middle East oil shock threatens to push the UK economy to the brink of a technical recession within weeks.

The Item Club, the influential economic forecasting group, now expects the UK to “flirt” with recession through the second and third quarters of the year, with GDP growth halving to just 0.7 per cent in 2026, down from 1.4 per cent last year. Growth in 2027 is pencilled in at a “still-below-par” 0.9 per cent, a grim backdrop for owner-managed businesses already contending with tighter margins and nervous customers.

The trigger is the closure of the Strait of Hormuz, the chokepoint through which roughly a fifth of the world’s oil passes. The International Energy Agency has described the disruption as the largest supply shock in the global oil market’s history. Shipping through the strait remained at a standstill on Sunday after Tehran reasserted control of the waterway, with Donald Trump and the Iranian regime accusing one another of breaching the ceasefire struck in the wake of February’s US-Israeli strikes.

The American president accused Iran of a “total violation” after reports of fire being directed at vessels near the strait, and repeated his threat to target Iranian bridges and power infrastructure unless Tehran accepts Washington’s terms. Brent crude fell roughly 9 per cent to below $90 a barrel on Friday after Iran signalled it would reopen the waterway, which has been effectively closed since the 28 February attacks.

For British SMEs, many of whom still carry the scars of the post-Ukraine energy crisis,  the implications are stark. Matt Swannell, chief economic adviser to the Item Club, said: “Consumers’ spending power will be squeezed, while more expensive financing arrangements and a less certain global economic backdrop will pour cold water on companies’ investment plans.”

The labour market is forecast to deliver the “biggest jolt” since the pandemic. The Item Club expects unemployment to climb to 5.8 per cent by the middle of next year, with an additional 250,000 people out of work as firms trim headcount. Joblessness is not expected to drift back down to 4.75 per cent until 2029. Swannell flagged a “worrying switch” in the make-up of unemployment, shifting away from new entrants joining the labour market and towards outright redundancies, a trend that tends to hit smaller employers hardest.

Inflation, meanwhile, is projected to run at close to double the Bank of England’s 2 per cent target by the year-end. Even so, the Item Club does not expect “a repeat of 2022”. A softer economy and weakening jobs market should make it harder for companies to pass cost increases through to customers “as aggressively” as they managed in the months following Russia’s full-scale invasion of Ukraine.

That subdued pass-through explains why the Bank is unlikely to reverse course on rates. The Monetary Policy Committee is judged to view current borrowing costs as already holding back activity and “leaning against inflation”, with the Item Club pencilling in two further cuts by the middle of next year, welcome news for SMEs weighing refinancing decisions.

Separate analysis from EY underlines just how heavily geopolitics is weighing on boardrooms. Of the 55 profit warnings issued by UK-listed businesses in the first quarter, 49 per cent cited policy change and geopolitical uncertainty as a leading driver, the highest proportion recorded for that cause in more than 25 years of the firm’s tracking. The FTSE travel and leisure sector, a bellwether for discretionary spending, notched up its joint-highest number of profit warnings in three and a half years.

The mood among consumers is similarly downbeat. The latest Deloitte tracker shows overall consumer confidence has slumped to its lowest level since 2023, falling 3 percentage points during the first quarter, the sharpest quarterly drop since early 2022. Five of the six confidence measures compiled from Deloitte’s survey of 3,200 UK consumers fell, with the steepest decline coming in sentiment around household disposable income. Discretionary spending tumbled 7 percentage points to its weakest reading since the start of 2023.

For Britain’s SME owners, the message from the data is unambiguous: the next two quarters will test cash flow, hiring plans and pricing power in ways not seen since the pandemic. Those who move early to shore up working capital, renegotiate energy contracts and diversify supply chains away from Gulf-dependent routes are likely to be the ones still standing when growth finally returns.

---

AUSTIN, Texas — Elon Musk has reignited global debate over the future of labor with a viral video clip in which the Tesla and xAI CEO declares that rapid advances in artificial intelligence and robotics will soon render working optional, paving the way for an era of unprecedented abundance where people can obtain virtually any goods or services they desire.

The 56-second excerpt, posted Monday by X user @XFreeze, has already amassed more than 77,000 views and hundreds of replies within hours. In the footage, Musk, seated in what appears to be a Tesla facility, gestures animatedly as he outlines a vision that has become a recurring theme in his public remarks over the past year.

“I’m confident that if AI and robotics continue to advance — which they are advancing very rapidly — working will be optional, and people will have any goods and services that they want,” Musk states in the clip. He adds that AI and robotics are progressing so quickly that they could eventually satisfy nearly every human need. “At that point, abundance becomes the default, and the real question is no longer about production, but purpose.”

Elon Musk on the rapid advancement of AI and robotics

“I’m confident that if AI and robotics continue to advance which they are advancing very rapidly working will be optional, and people will have any goods and services that they want”

AI and robotics are advancing so fast… pic.twitter.com/X76G8getXm

Advertisement

— X Freeze (@XFreeze) April 20, 2026

Musk continues by noting practical limits on consumption. “There is a limit — people can only eat so much food. But I think if you can think of it, you can have it in the future,” he says, underscoring his belief that scarcity could give way to a post-work society driven by intelligent machines.

The comments echo predictions Musk has made in recent interviews and forums dating back to late 2025. At the U.S.-Saudi Investment Forum and on entrepreneur Nikhil Kamath’s podcast, he forecasted that work could become optional within 10 to 20 years, likening it to playing sports or a video game rather than an economic necessity. He has repeatedly tied this outlook to Tesla’s humanoid robot Optimus and breakthroughs in AI hardware, including the company’s AI5 and upcoming AI6 chips.

Tesla has poured resources into Optimus, aiming for a general-purpose bipedal robot capable of performing unsafe, repetitive or boring tasks. Musk has described Optimus as a cornerstone of sustainable abundance, posting in December 2025 that “the future is going to be AMAZING with AI and robots enabling sustainable ABUNDANCE for all.” In February and March 2026 updates, he highlighted deployments of Optimus units at Supercharger stations and praised the Tesla AI team’s progress on real-world autonomy.

xAI, Musk’s separate artificial-intelligence venture, is also accelerating development of models like Grok to complement robotics efforts. The convergence of these technologies, Musk argues, will eliminate traditional labor demands and shift humanity’s focus from survival to higher pursuits such as creativity, exploration and personal fulfillment.

Yet the vision has sparked intense discussion — and skepticism — across social media and among economists. Replies to the viral post range from enthusiastic support to pointed concerns. One user wrote that “if everything becomes abundant, then scarcity just moves somewhere else,” while another warned, “He is missing a crucial point. Who owns and controls AI?” Several commenters raised the issue of purpose, noting that many people derive meaning from their jobs and could struggle in a work-optional world. “The end of scarcity isn’t the end of effort; it’s the birth of pure purpose,” one reply observed.

Critics question whether the benefits of abundance will be widely shared. Musk has acknowledged that reaching this future will require “a lot of work,” but some analysts worry about wealth concentration if a handful of companies control the underlying AI and robotics infrastructure. Others point to historical parallels: past automation waves created new jobs, but AI’s ability to learn and adapt could disrupt entire sectors simultaneously.

Economists and futurists have long debated similar scenarios. Proponents of universal basic income or “universal high income,” as Musk has sometimes referenced, see AI-driven abundance as an opportunity to decouple survival from employment. Detractors argue that without careful policy, the transition could exacerbate inequality, with displaced workers facing uncertainty while tech leaders reap rewards.

Tesla’s own trajectory offers a glimpse into the changes. The company’s Full Self-Driving technology and Optimus prototypes already hint at robots handling manufacturing, logistics and household chores. Musk has said Optimus could eventually outnumber humans, performing tasks from factory assembly to elderly care. In January 2026, he celebrated the Tesla AI chip design team’s progress, predicting AI5 and successors would become the highest-volume AI chips in the world.

Broader industry trends support Musk’s optimism about speed. AI capabilities have advanced faster than many forecasts, with models now demonstrating reasoning, creativity and physical-world understanding through robotics. Companies like OpenAI, Google DeepMind and Chinese firms are racing to deploy similar systems, intensifying the global competition Musk frequently cites.

Still, practical hurdles remain. Current robots lack the dexterity, reliability and cost-effectiveness for mass deployment in every home or workplace. Energy demands for training and running advanced AI are enormous, raising sustainability questions. Regulatory frameworks around safety, liability and job displacement are only beginning to form. Musk himself has cautioned that the path to abundance involves significant engineering challenges and societal adjustments.

The viral clip arrives amid heightened public interest in AI’s societal impact. Recent polls show mixed feelings: many Americans welcome productivity gains but fear job losses and ethical dilemmas. In education, healthcare and creative fields, AI tools are already reshaping workflows, prompting questions about what roles humans will retain.

Musk’s emphasis on purpose aligns with philosophical discussions dating back decades. If machines handle production, humans might pursue art, science, community service or space exploration — areas Musk champions through SpaceX. He has described a future where people “do things for cause” rather than necessity, echoing themes in his earlier remarks about money becoming irrelevant.

Supporters of the vision highlight potential upsides: reduced poverty, more leisure time, accelerated innovation. Families could spend more time together; individuals could explore passions without financial pressure. Environmental benefits might follow if robots optimize resource use and renewable energy scales alongside AI.

Skeptics counter that human motivation often stems from necessity and competition. Without work as a central organizing force, societies might face mental-health challenges, inequality in access to advanced technologies or even new forms of scarcity around attention, status or rare experiences. One reply to the post captured this tension: “If the material is completely rich, will there be many people who can’t find a goal in life?”

For now, Musk’s companies continue pushing boundaries. Tesla aims to ramp Optimus production, while xAI expands data centers and training clusters. Government and academic institutions are studying the implications, with some proposing pilot programs for post-work economic models.

The Monday video’s rapid spread on X underscores how Musk’s pronouncements continue to shape public discourse. Whether the timeline of 10 to 20 years holds remains uncertain — Musk has invited skeptics to “play this back” in the future — but few dispute that AI and robotics are advancing at breakneck speed.

As the clip circulates, it invites reflection on a profound shift: from an economy defined by labor scarcity to one defined by meaning. Musk’s message is clear — the technology is coming. The deeper challenge lies in how humanity prepares for the abundance it promises and the questions of purpose it leaves behind.

In boardrooms, classrooms and living rooms worldwide, the conversation sparked by a 56-second clip is only beginning. For Musk and millions following his lead, the future is not about whether machines will take over work, but what humans will choose to do once they no longer have to.

The Indian equity markets ended last week on a strong note, extending gains for a third consecutive week amid improving sentiment and sustained buying activity. The broader market performed well, with benchmark indices reflecting steady strength. In an interaction with ET Now, Rajesh Palviya from Axis Securities noted, “It was a week of optimism… Nifty made higher high-low formation which is a sign of sustained buying action.” He also highlighted the formation of a strong bullish pattern, stating, “A strong bullish Marubozu candle on the weekly chart is a sign of very strong buying action.”

According to Palviya, the Nifty is currently testing an important technical level. “If Nifty breaks above 24,400, it can trigger short covering and extend the rally towards 24,600–24,700,” he said, while advising investors that “buy on decline should be your strategy… as long as Nifty is holding above 24,100.” He added that Bank Nifty is also showing a similar structure, noting, “Bank Nifty may see further short covering above 56,800 and could scale up to 57,500.” The overall trend, therefore, continues to favor the bulls as long as key support levels remain intact.

On the sectoral front, Palviya pointed out that several pockets of the market are showing strength, though select segments offer better risk-reward opportunities. “FMCG basket is looking quite interesting… after a long consolidation, stocks are giving breakout,” he said. At the same time, he emphasized that “metal and capital goods sectors are more promising in terms of momentum,” with buying interest persisting even at higher levels. He also observed that “EMS stocks are also showing sign of buying interest,” indicating a broader participation in the rally.

Sharing stock-specific ideas, he highlighted opportunities in select counters. “PNB Housing Finance… has potential to extend gain, with target around 945 and stop loss of 915,” he said. On Mazagon Dock, he noted, “breakout of falling wedge formation… target of 2750 with stop loss of 2575.” These picks reflect a combination of technical breakouts and sustained upward trends.

Defence stocks, meanwhile, remained in focus throughout the week, supported by strong price action and continued investor interest. “Most of the defence stocks have done well… continuity of buying interest is there,” Palviya observed. He added, “Apollo Micro… breakout of long consolidation… above 270, it may move towards 310–315,” while noting that “Zen Tech… breakout after six-month consolidation… above 1600, target could be 1700–1750.” Summing up the space, he said, “overall, this basket is showing sign of buying interest… continuity of uptrend is clearly visible.”

With indices maintaining a pattern of higher highs and higher lows and multiple sectors contributing to the rally, the near-term outlook remains constructive. However, market participants are advised to remain cautious near resistance levels and continue to follow a disciplined approach. The underlying trend remains positive, with a clear preference for buying on dips as the market heads into the coming week.

Indian benchmark indices erased all morning losses and moved into the green, with Sensex and Nifty gaining around 0.5% each as continued strength in the rupee, FII buying and other key factors pushed the market higher.

Sensex gained more than 400 points to cross 78,900, while Nifty 50 jumped 119 points to 24,473, as of 12.48 pm. The sharp gains added nearly Rs 3 lakh crore to the total market capitalisation of all companies listed on BSE, pulling it up to Rs 468 lakh crore.

Zudio-parent Trent and State Bank of India (SBI) shares were the top gainers on the Sensex, jumping nearly 4% and 3% respectively. Asian Paints, Eternal, NTPC, Bajaj Finance, Power Grid, Adani Ports and ICICI Bank shares followed, rising 1-2%. On the other hand, L&T, Titan and Kotak Mahindra Bank shares dropped nearly 1% each to lead losses.

Even as India VIX, which measures volatility in the market, remained 5% higher at 18.12, broader markets erased all losses to move into the green, with Nifty Smallcap 100 and Nifty Midcap 100 indices rising up to 0.4%. Sectorally, the Nifty PSU Bank index gained around 2% to lead gains.

Here are the key factors pushing the Indian stock market higher today:

1) Rupee gains

The Indian rupee continued to gain against the US dollar, opening 0.1% higher at 92.8250 on Monday, against the previous close of 92.9250. The Indian currency has rebounded sharply after crossing the 95 mark earlier last month, as the war in the Middle East and the subsequent rally in oil prices raised worries over the possible impact on India’s macroeconomy.

“Overall, the rupee remains supported in the near term, but sustainability will depend on the outcome of geopolitical developments and crude price stability,” said Jateen Trivedi, VP Research Analyst, Commodity and Currency, at LKP Securities.

2) FIIs remain net buyers for third day

Foreign investors remained net buyers of Indian equities for the third consecutive session, purchasing shares worth Rs 683 crore during an extremely volatile session on Thursday. FIIs have bought Indian equities worth more than Rs 1,731 crore over the three days.
However, these purchases are negligible compared to the massive sell-off seen earlier. FIIs have remained net buyers for only four out of the last 32 sessions. They sold Indian equities worth more than Rs 1.6 lakh crore between March 2 and April 9.
After the massive sell-off, it is difficult to say whether the previous session’s slight net buying by foreign investors marks a decisive change in their behaviour or just the calm before another storm.

3) Oil prices sustain below $100 per barrel

After declining over the weekend amid expectations of easing tensions, oil prices rose following fresh escalations. Brent crude futures surged more than 5% to $95.17 per barrel, while WTI crude gained around 6% to $88.83 per barrel.

However, prices remain below the crucial $100 per barrel mark, which they had crossed for the first time since March 2022 following Russia’s invasion of Ukraine.

4) Asian markets in green

Asian markets remained in the green on Monday, with Hong Kong’s Hang Seng gaining more than 1%. South Korea’s Kospi gained around 0.4%, while China’s Shanghai Composite rose 0.75%. Japan’s Nikkei, meanwhile, was up 0.7%. European markets slipped into the red.

Wall Street had ended sharply higher on Friday, with the Nasdaq gaining more than 1.5% and the S&P 500 rising over 1% amid rising expectations of fresh peace talks between Iran and the US culminating in a long-lasting ceasefire in the oil-rich Middle East.

Why caution is warranted

Despite the optimism in the markets, caution is warranted. The US on Sunday said it had seized an Iranian cargo ship that tried to run its blockade, and Iran said it would retaliate, raising the possibility that the ceasefire between the two countries might not last even for the two days it is set to remain in force.

Additionally, Iran said it will not participate in the second round of negotiations after the previous round failed to culminate in a peace deal earlier this month in Pakistan.

“One cannot restrict Iran’s oil exports while expecting free security for others. The choice is clear: either a free oil market for all, or the risk of significant costs for everyone,” Iran’s First Vice President Mohammadreza Aref wrote on social media.

Meanwhile, Trump said his envoys would arrive in Islamabad on Monday evening, one day before a two-week ceasefire ends. A White House official said the US delegation would be headed by Vice President JD Vance, who led the war’s first peace talks a week ago, and would also include Trump’s envoy Steve Witkoff and son-in-law Jared Kushner. Pakistan, which has been acting as the mediator, seems to be preparing for the talks, although the ground for peace negotiations remains shaky.

With the de-escalation and escalation dynamic in the West Asian conflict continuing, the market will remain volatile in the near term, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “With Iran hardening its position again, closing the Strait of Hormuz and threatening to retaliate to the US seizure of an Iranian ship ‘violating the US blockade’, there is potential for a flare-up of the conflict when the ceasefire ends on April 22. However, market signals do not reflect renewed concern over a flare-up of the conflict,” he said.

(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Global equity markets have staged a remarkable recovery, with the US benchmarks leading the charge. The S&P 500 has surged to an all-time high, effectively recouping losses triggered by recent geopolitical tensions. Emerging markets have mirrored this upward momentum, suggesting a broader risk-on sentiment among investors. However, beneath the surface of this rally lies a persistent concern: oil prices.

Speaking on the issue, Seth R Freeman from GlassRatner Advisory highlighted the broader implications of energy price volatility. “Oh, it is a major concern and more so it is priced in dollars, so it affects the entire global economy. And it drastically affects sentiment. This is becoming like a yo-yo, and we do not really know whose messaging we should be listening to, whether it is the government of Iran or the White House.”

Over the weekend, investors were inundated with a barrage of developments surrounding US-Iran relations, adding further complexity to market dynamics. Conflicting statements from both sides have kept traders on edge. Notably, crude prices, which declined on Friday, rebounded sharply by Monday morning—underscoring the fragile and reactive nature of the energy markets.

Freeman acknowledged the difficulty in navigating such an environment. “Well, it is certainly difficult to make a call, and we have to have some confidence in some of the forward-looking views on some of these major US stocks to maintain some stability here. But there are times to buy and times to sell, and times to maybe do nothing. And we just do not have clarity. The story seems to be changing every four to five hours. At the same time, we have consumers globally, and in particular emerging markets and other countries besides the United States, that depend on natural gas—even natural gas for cooking—and going back to oil, so much fertiliser is shipped through the strait from oil, so this is going to affect food prices ultimately.”

The uncertainty surrounding geopolitical developments has raised questions about whether markets are getting ahead of themselves. Despite ongoing tensions—including reported blockades and maritime incidents—equity markets have shown resilience, leaving many analysts puzzled.

Freeman pointed to the contradictions in political messaging as a source of confusion. “It is so hard to say. Here we are, we have a blockade. We are shooting at ships. Meanwhile, we are supposed to be having peace negotiations. Iran says there are no negotiations. I think for those who kind of think through this a bit, the messaging from the White House is very confusing because we were talking about regime change and the Iranian regime, and Trump is talking about blowing up Iran. Well, that hurts Iranians. We are not hearing about targeting the regime leaders anymore. And so, it is just very misguided, and it is just making it very difficult to decipher what the best moves are for the market. Meanwhile, it looks like these AI companies are going to continue to stay on a high-speed race, with continued support in those prices—and chip makers in particular.”
As markets balance optimism with uncertainty, the divergence between strong equity performance and volatile geopolitical signals suggests that investors may need to tread cautiously in the weeks ahead.

Aristotle Capital Management is an independent/employee-owned investment management organization that specializes in equity and fixed income portfolio management for institutional and advisory clients worldwide.
Note: This account is not managed or monitored by Aristotle Capital Management, and any messages sent via Seeking Alpha will not receive a response. For inquiries or communication, please use Aristotle Capital Management’s official channels.