UK sees glimmer of hope after Trump's midterm rout, but London stays cautious

Senior British politicians and officials see a chance to end the war on Iran after the Republicans' rout in the US midterm elections. At the same time, they warn that President Donald Trump is not yet 'a spent force'.

Andy Burnham was having dinner at the Commonwealth summit in Antigua when the results of the US midterm elections started rolling in. UK government officials in the Caribbean with the prime minister scrolled through their phones with growing incredulity as the scale of the Republicans' defeat became clear. One said: "We knew it was going to be bad for Trump but it was historic result after historic result: Kansas, South Carolina, Texas." He added: "Finally, there's a bit of hope."

As he faced the cameras the following morning, Burnham struggled to disguise his relief. He said: "I feel the world has an opportunity now to unite around the issue that is affecting us all and that's the cost of living." He added: "But I can't get people's cost of living pressures down until the conflict in the Middle East is resolved ... I'll be working for de-escalation, to make it very clear."

The energy price shock and subsequent interest rate hikes caused by the US war on Iran have severely affected economies around the world. That is the main reason why this set of midterm elections – in which the Democrats took control of Congress – are the most consequential for the UK in decades, with the potential to have a greater impact at home than almost any domestic announcement. Earlier this month, the prime minister admitted his first budget had been "less radical than he had hoped", with the global economic volatility forcing the government's hand.

But while the trajectory of the Iran conflict is the inevitable focus, it is not the only direct impact of the Republican rout on the UK. Trump's potential approach to Russia and Ukraine, the threat of more tariffs and the wider political ripples of the "blue tsunami" are all being pored over at Westminster.

While the US president's domestic powers will be constrained, he still wields significant influence over foreign policy. One UK government insider said: "We've all learned over recent years that all of this lands on the desk of just one decision-maker in Washington. How he interprets these elections matters more than how they're seen in any other global capital."

A Democratic-run Congress could become "a thorn in the president's side", said Sarah Elliott, the director of the special relationship unit at the Prosperity Institute. She said Congress probably will become a thorn in the president's side, so he may become distracted by domestic issues rather than international ones.

David Miliband, a former UK foreign secretary now based in New York, said: "There is a chance that the cross-party congressional majority to support Ukraine finds its voice and leverage. I hope so." He added: "Maybe the impact of tariffs on prices will prompt a second look. But the presidency remains 'imperial' in foreign policy, so there are no guarantees."

Kim Darroch, the UK's man in Washington the last time Trump was in office, said the president still had the ability to wreak chaos on the world stage. He said: "You can't formally declare war without congressional approval but you can engage in conflict. He can impose tariffs and insult allies and cosy up to dictators. All of that is still open to Trump."

Darroch added that Trump has held his views about the uselessness of allies, the value of tariffs and the world being about bigger powers for decades. He said: "He's not going to change his mind now."

However, over the past few days, the mood music in Washington toward Iran already appears to have shifted. There is hope in diplomatic circles that the midterms have strengthened the resolve in Washington for a negotiated conclusion to the war. Miliband said: "I would guess that the odds on renewed assault on Iran have lengthened, and the pressure for resolution will be strengthened."

Others, however, are more cautious. Emily Thornberry, the chair of the Commons foreign affairs committee, said: "Equally likely – and that's the problem – is that he might use his three aircraft carriers and his buildup of troops in the Gulf and just decide he's going to invade. Honestly, we don't know." Lord Darroch said Trump could go for one last massive attack, particularly focusing on blowing up nuclear sites, then walk away and be able to say it's been obliterated – again.

UK ministers are, however, cautiously optimistic. The markets appear to be as well – with oil prices dropping sharply after the results. One minister said: "We know all the risks. We know he could change his mind on Iran again, that he could strike a deal with Putin that locks out Ukraine, that he could announce more indiscriminate tariffs. But we also see this as a moment of opportunity."

Thornberry highlighted the Democrats' very different foreign policy agenda. She said: "Let's see what happens. I think they come in from January and believe that they've got a mandate to finish the Iranian war." She added: "On top of that, they are much more sympathetic, as is the general public, to the plight of the Ukrainians and believe that the American president is not playing fair."

Labour figures are already building links in the new-look Congress, with some Democrats proposing a bill modelled on Labour's approach to Israeli settlers in the West Bank.

UK ministers say they have had no indications that Trump is planning more tariffs – though acknowledge they could be taken by surprise. One said that if the UK does something big on legislation or regulation surrounding big tech or AI, then you can imagine it happening. But some in UK policy circles argue that a Democrat-run Congress could help advance some of the UK's international priorities, such as AI regulation or clean energy, both of which have been resisted by the Trump White House. Government sources said that while they would revive traditional links between Labour and the Democrats before the next presidential election, they were proceeding carefully. More than one cited the fact that Trump accused Labour of "interference" during the last presidential election after party staff volunteered for Kamala Harris's campaign. A senior aide said: "We need to be cautious – but also it's entirely reasonable for us to engage with them."