LONDON, March 28, 2026, 19:07 GMT
The FTSE 100 barely scraped out a weekly gain after a choppy stretch, finishing Friday at 9,967.35, just 0.05% lower for the day. The FTSE 250, tracking mid-sized firms, dropped 1.56% to 20,964.75, ending the week down more than 1.7%. AstraZeneca added 3.4%, and gold miners also lent support, helping prevent a steeper slide for the blue-chip index. Lloyds slipped 2%, and Metlen sank 8.6%. 1
The split’s the real story, not just the headline. Britain faces outsized risk from the energy shock—UK power prices track gas, after all. New surveys out this week flagged a jump in inflation expectations and factory input costs, but consumer confidence is sliding. Retailers are already signaling that Middle East tensions mean higher prices, weaker demand. So the FTSE 250, tightly tied to the domestic economy, is painting a gloomier picture than the FTSE 100. 2
Oil swings and chatter about a ceasefire shaped the week’s action. The FTSE 100 finished Tuesday up 0.72%, jumped another 1.42% on Wednesday, but dropped 1.33% Thursday and edged lower by 0.05% Friday. “The UK’s outsized exposure to the energy sector was good news again today and gave the FTSE 100 fuel to pull ahead of the market pack,” AJ Bell’s Dan Coatsworth said Tuesday. 3
Still, sentiment in London stayed subdued. The STOXX 600 in Europe squeezed out a 0.4% gain for the week, but over in the U.S., the Dow on Friday slipped into correction territory—down 10% from its latest high. 4
The culprit in Thursday’s selloff was easy to spot. 3i Group sank 17.6% after Action, its discount retail arm, projected 4% to 5% same-store growth this year—essentially unchanged from the 2025 outlook. Next took the opposite tack. CEO Simon Wolfson noted UK sales were steady, adding that any price hike in June or July would be capped at “1% to 2% maximum” if conflict-driven costs didn’t ease. 5
Rates are still casting the longest shadow over UK-focused stocks. Traders in money markets are now betting on up to three 25-basis-point hikes from the Bank of England this year—a stark shift from the rate cuts they were predicting before the conflict erupted. Most economists polled by Reuters, however, aren’t budging and still forecast no move in 2026. 6
Friday brought no relief from the latest round of domestic numbers: retail sales dropped 0.4% in February, giving back some of January’s gain. The CBI’s separate survey flagged March retail volumes tumbling at the fastest pace since 2020. As for sentiment, GfK’s consumer confidence index slipped to -21, marking an 11-month low. “People simply do not feel the economy is robust enough to ride out the knock-on effects from the Middle East conflict,” said Neil Bellamy, consumer insights director at GfK. 7
The main worry now is that what started as a market issue quickly shifts into a cost problem. Brent closed above $112 a barrel on Friday. The Strait of Hormuz, a key route for oil exports, is still basically shut down. “Words alone aren’t cutting it right now,” said Matt Britzman, analyst at Hargreaves Lansdown. Retailers ranging from H&M to Co-op are flagging the risk: if the conflict drags on, shoppers could see steeper prices and softer demand. 8
London’s dealing with a split personality. The FTSE 100 keeps getting support from heavyweight global healthcare and commodity stocks. On the flip side, domestic shares are feeling the squeeze—higher costs, jittery spending. Unless oil prices come down and shoppers regain their footing, this divide could easily persist into April.
