Inside Business with Ciaran Hancock
Will a Middle East peace deal make any difference to inflation?
17 Jun 2026
Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the potential impact of the Middle East ceasefire on energy prices?
Hello, I'm Ciarán Hancock. Welcome to Inside Business. This week I'm talking to Cliff Taylor of the Irish Times about the US-Iran peace deal that's on the table and what it might mean for the Irish economy. In the second half of the show, Luke Steadman, General Manager of Toner's Pub in Dublin's city centre, joins me to talk about the bump in business the venue is getting from the World Cup.
He also explains why the pub doesn't offer music or food on the premises. But first to the Middle East conflict and the proposed peace deal between the US and Iran. A 60-day ceasefire has been agreed to iron out the fine details of the agreement, but hopes are high that this will end the conflict, see the Strait of Hormuz open fully for shipping and result in lower energy prices going forward.
So I began by asking Cliff Taylor to outline the key elements of the peace deal and how they might impact on the Irish economy. Here we go.
Well, I suppose from an economic point of view, the promise is the Strait of Hormuz is going to reopen again. And that's the key thing. The US is going to end its blockade. Iran is going to withdraw its threats against ships. And oil is going to start flowing. Indeed, it started flowing already to some extent.
Chapter 2: How might the peace deal affect the Irish economy?
So that's good news. Then I suppose we get into the ifs and buts. The ifs, buts and maybes, you know, is this deal going to be signed? It looks like it probably is, but then there's going to be 60 days at least or an estimated 60 days of negotiation to try and sort out a final peace deal.
A ceasefire during that time.
A ceasefire during that time. That's the intention. You could see it breaking down. You know, there's all the questions about Israel and whether they're signed up or not and Lebanon and Hezbollah. Yeah. So look, you know, anyone's guess is as good as anyone else's.
And a lot of questions as to whether the US is putting in place an investment fund, potentially for $300 billion. Now, Trump has said no, he said they're not going to invest 10 cents in the rebuild of Iran.
But, you know, can we trust what he says? Yeah, probably not.
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Chapter 3: What are the implications of the Strait of Hormuz reopening?
But I guess we'll have to see how that one plays out. That is in the news today, all right. And Iran, obviously, you know, in a poor financial position after what's happened. I suppose what investors will be looking at, they'll be watching that and watching what it means for the longer term kind of dynamic in the region between the Gulf states and Iran and Trump and Israel.
But the short term question is, is there a ceasefire that's going to hold? Has the fighting stopped? Has the threat to oil and energy supplies now ended? That's kind of the... The channel of influence or whatever way you want to put it on the world economy already has hit eastern economies very hard. And the impact was spreading west, of course, as time went on.
I suppose one way to look at it is if this does hold, then it removes a kind of a serious downside threat for the rest of the year. Because there had been fears, you know, this is going to take a turn for the worse. The fighting would start again. There'd be a shortage of not only higher prices, but perhaps fuel shortages in some areas.
Now, the market had shown itself to be, you know, maybe surprisingly resilient over the last few months.
Chapter 4: How has the FIFA World Cup influenced local businesses?
For example, there'd be all this talk about jet fuel shortages and planes not being able to take off. Hasn't happened. The oil market seems to have been resilient as well. Prices haven't gone up as much as the more pessimistic forecasters have said. And they've come down in recent days.
And they've come down significantly in recent days. Can I just, And say one thing to you, Gabriel McClough gave a speech yesterday, sort of talking to me, giving the background, if you like, to the ECB rate rise, which was announced last week and the inflation outlook and stuff like that. And he said there are two effects from what's happened in the Middle East.
One was the immediate one on the fuel price shock, which we saw in the four courts and the government intervened and so forth. But he said there's been a secondary shock now. The initial energy shock is spreading and these patterns are broad based across all sectors, retail services, industry and construction. So we're seeing price creep.
in all of those sectors in Ireland is a pretty expensive economy as it is at the moment. So we don't, you know, we don't need that.
Chapter 5: What challenges does Toners Pub face in attracting customers?
But he said, another concern is the potential for long-term energy supply disruption relating to the destruction of infrastructure, of which we have little clarity at this stage.
We do, very little. That says... This is not an upbeat speech. No, no. I suppose two bits of context around that. The first is that the ECB are clearly... trying to underline the fact that they're willing to act to keep inflation down. And the reason they're doing that is because they're trying to affect people's expectations of what's going to happen to inflation.
So that was part of why they increased interest rates last week. They're sending a message They're trying to ensure that people don't start baking in higher inflation into their expectations for wages, for prices, and, you know, that it doesn't start rolling on.
And they're worried that, particularly looking at the service sector across the EU, which is kind of a good measure of domestic inflation as opposed to inflation that's imported, that that's starting to happen. So there was nothing... central bank, any central bank can do about oil prices or gas prices or electricity prices.
What they do try and do is stop that inflationary impulse, if you like, spreading throughout the economy.
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Chapter 6: What is the current pricing strategy for pints at Toners Pub?
So that's what they're at. And I think we will see a bit of that hawkish talk from the ECB and we've seen it from other central bank governors. So I think they're all kind of on the same page now, if you like. I in terms of trying to send this message out. And depending on how things pan out, might we see another interest rate increase in July or September? We might.
Nonetheless, you'd have to say that The signing of a deal, if it holds and prices coming down, is good news for interest rates and good news for borrowers in the longer term because the threat of kind of significant increases, you know, is hopefully, would hopefully super off the table.
In terms of the... They're hardly increasing in July now if there's a 60-day ceasefire. I would have thought... To allow these talks to complete.
I would have thought not unless some of the inflation figures in the meantime are very bad. That said, it does seem, reading between the lines of some of the statements over the last few days, that there is some support on the ECB board from the harder liners to do so. So we just have to wait and see, I suppose, how that one pans out.
The ECB had been mindful of what happened in 2022 when they were too slow to act.
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Chapter 7: How have drinking habits changed in Ireland over the years?
But some of the wiser heads might be mindful of what happened after the financial crash as well, where they increased interest rates twice and had to reverse fairly pretty quickly in 2011 because the European economy was on the floor.
2022, of course, was the Ukraine. Sorry, yeah, absolutely. And the spike.
And the spike in inflation. That happened post-SAC, yeah. You know, there's no sense of anything like that at this stage. The infrastructure one is interesting. And there were these war... I mean, there's... The fog of war comes into the equation here.
There were these warnings from Qatar and from some oil energy experts that very significant damage had been done to LNG, liquefied natural gas, infrastructure by the war, and that this would take potentially years to repair.
Now, I know there have been reports in recent days that have been a good deal more optimistic and guitar saying that, you know, 40, 50 percent of this might be back on stream within months now and that this is all going to happen much more quickly than anticipated. So we just have to see how that one plays out.
But I think there's a possibility that some of the more apocryphal stories that we've heard over the last few months hopefully aren't going to... It isn't going to be as bad as that. And LNG, I mean, the interesting thing I suppose is that...
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Chapter 8: What factors influence the pricing and availability of drinks in pubs?
the international gas market is tight and LNG is part of the picture. And obviously, if there's a shortage of LNG coming out of the Gulf states, then prices for shale gas in America increase, prices for imports to Europe increase. There's a bit of a bidding war for the ships that are on the sea at the moment, all pushing prices up.
Talking to someone involved in the energy market in the last decade, couple of days, and he was saying there's two things to watch over the summer in terms of gas prices. And of course, gas prices are important for Ireland because a lot of households rely on gas, but also we rely on gas to produce our electricity. And it is kind of the price that is vital for electricity.
So there's two things to watch over the summer. One is this infrastructure issue and how that plays out. And there's very little clarity around that. The other is that the European Commission are going to want, and understandably, member states are going to want to fill their tanks up before the winter in case of any other problems with supply in the months ahead.
And that's going to increase demand. And the question is, is that going to push up prices of wholesale gas?
Some of those stocks. I mean, each member state is legally required to... isn't that right, to hold a certain amount of days? I can't remember how many days of stock. And some of that has been run down over the last few months. It has.
And summer is the time that traditionally it's refilled because demand from elsewhere is traditionally lower.
And you've got to replenish anyway because I think the fuel has a certain lifespan. You've got to keep moving it on.
Absolutely, yeah. So that's one to watch. Now, that's at wholesale grass prices. I mean, there's various ways of expressing them, but we buy from the UK market, so it tends to be in pence per term. So they had reached over 150 pence per term during the crisis. They're now down under 100. They were maybe kind of around the 80 region before this all started.
So they've come down a fair bit of the way. There's a bit of a way to go yet. So I think for electricity prices... Obviously the ESB retail arm increased prices there a couple of weeks ago. That was kind of a catch-up move on the rest of the market. A lot of the companies had moved in November, and some of the smaller suppliers like prepay also increased recently.
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