Europe Explained

Iran’s foreign minister, Abbas Araghchi, said on Sunday that mediators working on a US-Iran peace deal have not travelled since the US midterm elections. Qatar and Pakistan are among the powers that have tried for months to halt the war, which the United States and Israel launched in late February. Most fighting has stopped, but Iran is still working to blockade the Strait of Hormuz and the US Navy maintains a counter-blockade of Iranian ports.

The United States and Iran remain far apart. Iran’s demands include ending the war on all fronts, unfreezing its assets, lifting oil sanctions and ending the counter-blockade. A senior Iranian official said Iran will not negotiate unless Washington meets seven conditions from a June interim agreement. President Donald Trump was due to meet Qatar’s prime minister on Monday, but US and Gulf officials doubted a deal was near. In September Iran proposed a seven-day plan to reopen the strait, then offered to do it in two days, an offer Araghchi repeated on 8 November. He wrote that voters had made their choice and it was time for the White House to make its own.

In Saudi Arabia, the East-West oil pipeline, about 1,200 km long, was struck in the Medina region. A limited fire was put out, there were no casualties and operations were not affected.

The story reaches Europe in two ways. French Foreign Minister Jean-Noel Barrot said Iran’s Revolutionary Guards were behind cyberattacks on supermarket fridges on 11 and 12 October. He said France will seek European sanctions. The strait also matters for energy supplies, which is why the Bank of England links energy costs to prices (see UK).

Bank Rate is the Bank of England’s main interest rate. It sets the cost of borrowing across the UK. On 4 November the Monetary Policy Committee raised it by 0.25 percentage points, from 3.75% to 4%, and published the decision on 5 November. The vote was 8-1. Catherine Mann wanted a bigger rise, to 4.25%.

The reason is energy. The Bank said the Middle East conflict, now in its ninth month, has kept energy prices high. Brent crude averaged $108 a barrel and UK natural gas averaged 216 pence per therm, 38% and 81% above the levels in July’s report. The Committee expects energy costs to feed into other prices.

UK inflation rose to 3.5% in September. Bank staff project about 4.5% in the first quarter of 2027 and about 5% in the second, with inflation falling after that. The next decision is due on 17 December.

The New Safe Confinement is a giant steel structure that covers the remains of Reactor Four at Chornobyl, Ukraine. It was built so that the original sarcophagus, put up after the 1986 accident, could be safely taken apart. On 14 February 2025 a Russian drone strike punctured its inner and outer layers and damaged systems that contain radioactive material.

France, Ukraine and the European Bank for Reconstruction and Development (EBRD) co-chair a donor conference in Paris on 9 November. The bank is seeking at least 500 million euros for repairs. The G7 pledged 260 million euros in October and asked other partners to cover the rest.

There is a deadline. Repairs must be completed by 2030 to prevent moisture from corroding the steel arch, which could make radioactive material harder and costlier to manage. The EBRD aims to secure funding to award contracts and start major restoration in 2028, and the work should take about two years.

Who pays is a question. The bank does not expect Russia to contribute, and the costs could instead be recovered through future war reparations.