London, March 31, 2026, 18:02 BST
London shares managed to climb on Tuesday, yet even a late push couldn’t keep Britain’s major indexes from logging their worst monthly performance since 2020. The FTSE 100 finished the session up 0.48% at 10,176.45, and the FTSE 250 gained 1.19% to close at 21,203.71. Still, the FTSE 100’s eight-month winning streak came to an end, and the FTSE 250’s three-month run was also snapped. 1
The shock has hit both share prices and the rate outlook. Investors, according to Reuters, are now betting on two—maybe even three—Bank of England rate hikes of 0.25 percentage points each this year, a sharp pivot from the rate cuts they’d positioned for before the conflict. Official numbers show the UK economy barely grew at the close of 2025. And shop price inflation’s up: the British Retail Consortium said it reached 1.2% in March. Chief Executive Helen Dickinson pointed to rising “costs resulting from the conflict in the Middle East” making their way through supply chains, warning that inflation is set to climb. 2
The housing market’s mood is shifting, too. House prices climbed 0.9% in March, according to Nationwide—outpacing expectations. Still, Chief Economist Robert Gardner flagged global energy price spikes as “a significant shock to the global economy, clouding the outlook.” Capital Economics’ Ashley Webb added that with mortgage rates up and growth lagging, house prices could finish the year barely up 1%, or possibly go nowhere. 3
European shares caught a lift after the Wall Street Journal, via Reuters, said U.S. President Donald Trump was open to halting military action against Iran—even if the Strait of Hormuz remained mostly shut. Paris’s CAC 40 picked up 0.6%, Frankfurt’s DAX 40 gained 0.5%. Still, the STOXX 600 notched its sharpest monthly drop since June 2022. Fiona Cincotta, senior market analyst at City Index, described the rebound as a snapback from oversold conditions and pointed to “potentially encouraging news,” but flagged that these upbeat spells have fizzled out quickly in recent weeks. 4
Unilever slumped 7.2% on the FTSE 100—its sharpest slide since 2008—after revealing it’s deep into talks to merge its food arm with McCormick. That hit made the company the biggest laggard on the index. Miners, though, helped keep the FTSE in the black, as gold and copper prices moved higher: Antofagasta jumped 5.3%, Endeavour Mining added 4.2%, Fresnillo rose 4.1%, and Anglo American gained 2.8%. 5
The FTSE 250 had more action. Raspberry Pi surged 47% after beating annual earnings forecasts. Chief Executive Eben Upton told Reuters the company has been passing rising memory costs onto customers: “It’s probably not done, so we’ll keep passing those through.” Future tumbled 24%, hit by Google search traffic changes denting its higher-margin ad and e-commerce income. Ashmore gained 6.7% off the back of a new tie-up with Japan Post Insurance. 6
Relief has been modest so far. Shipping through the Strait of Hormuz — responsible for moving roughly a fifth of the world’s oil and LNG — is still facing disruption. Analysts surveyed for Reuters’ March oil poll marked their biggest-ever increase to the 2026 Brent outlook. Ole Hansen at Saxo Bank warned that “another few weeks of disruption” could lift prices enough to start denting demand. Over at NatWest Markets, economist Ross Walker noted Britain is heading into the shock with “very constrained” policy leeway. 7
So, traders are glued to the news, not the rally. UK manufacturing PMI drops Wednesday—a key snapshot of factory sentiment. And then there’s U.S. Defense Secretary Pete Hegseth, who flagged the next few days as critical in the conflict with Iran, underscoring the fragility of Tuesday’s bounce. 8
