London, March 18, 2026, 17:36 GMT
- The FTSE 100 slipped 98.31 points, finishing 0.9% lower at 10,305.29. The FTSE 250 also edged down, off 0.4% to 22,080.77.
- Brent crude settled at $108.21 a barrel in London, climbing from $101.95 late Tuesday, as the Iran war ratcheted up again.
- Diploma surged to an all-time peak after it lifted its 2026 forecast, yet losses in mining and consumer stocks dragged the broader market down.
The FTSE 100 in London slipped on Wednesday, reversing earlier advances as another spike in oil prices pushed investors to pare back risk ahead of policy decisions from the Federal Reserve expected later in the day, and from the Bank of England set for Thursday. The FTSE 250, tracking mid-cap UK firms, also closed lower.
This shift carries weight at the moment, as UK equities are again moving in tandem with the energy price surge and shifting rate expectations. The country remains deeply reliant on imported natural gas, leaving it vulnerable. According to economists surveyed by Reuters, few now expect a Bank of England rate cut on March 19; the majority have pushed forecasts for a 25 basis-point trim to April or June.
Brent finished the London session at $108.21 a barrel, with prices reacting sharply after fresh hostilities targeted Iran’s Pars gas field—rekindling anxiety over possible supply shocks. “Markets are back in panic mode,” said Kathleen Brooks, research director at XTB, cautioning that what started as a shipping headache could spiral into a full-blown oil supply crisis. MarketScreener
Early gains in London evaporated by the close. Stocks got a bump when Iraq restarted exports via Turkey’s Ceyhan pipeline, which knocked crude lower for a bit, but the relief didn’t last—oil prices swung higher again and global equities lost ground.
Sector moves offered little clear direction. BP managed a 0.7% gain, while Shell slipped 0.4%. Babcock, the defence firm, climbed 2.1%. Pressure from miners and consumer staples, though, weighed on the broader index, draining support from the benchmark.
Diploma surged to the top of the leaderboard. Shares notched a record after the distributor lifted its 2026 outlook, citing sturdy aerospace demand and solid gains for its seals business in North America. Jefferies called the guidance hike a sign of “strong growth across the group.” Reuters
Softcat shares climbed after the company raised its annual profit outlook, citing a surge in demand tied to artificial intelligence infrastructure. Chief Executive Graham Charlton called AI adoption “the early stages,” but pointed out that memory-chip shortages could pose a challenge in the second half. Reuters
The next hurdle lands fast. The Fed meets later Wednesday, with the Bank of England set for Thursday—consensus has the Bank Rate holding at 3.75%. Morningstar economist Grant Slade called concerns over a BoE hike “overdone.” Reuters
The risks aren’t hard to spot. Should crude hover at its recent peaks, or if new strikes target Gulf energy infrastructure, the UK could be looking at another burst of inflation right as the economy shows signs of losing steam. In that scenario, London stocks would be vulnerable to another steep drop, regardless of whether rates hold steady; analysts cited by Reuters now expect UK inflation to hit anywhere from 3% to 4% by end-2026 if energy costs stay put.
