LONDON, March 26, 2026, 17:18 GMT
London’s blue-chip FTSE 100 slid 134.67 points to 9,972.17 on Thursday, down 1.3%, as oil prices rebounded and optimism for a swift resolution in the Middle East lost ground. The FTSE 250 dropped 0.8%, back to 21,296.07, trimming off some of its gains from the previous day’s rally.
This shift lands just as Britain’s economic prospects take a hit. The OECD slashed its 2026 UK growth projection by 0.5 points, putting it at 0.7%, and bumped its inflation call up by 1.5 points to 4.0%—both the sharpest changes for any major developed economy.
Money markets have flipped from penciling in Bank of England rate cuts to now factoring in two, maybe three, 0.25-point hikes this year—a shift officials keep trying to tamp down. Deputy Governor Sarah Breeden argued the risk of 2022’s broad wage and price spirals is lower now. Policymaker Alan Taylor, for his part, backed leaving policy unchanged “until the impact becomes clearer.” Reuters
It wasn’t just London in the red. The CAC 40 in Paris ended down 1.0%, with Frankfurt’s DAX 40 sliding 1.5%. Over in New York, stocks were also weaker in afternoon trading, as investors tried to parse mixed messages from both Washington and Tehran.
London, heavy on oil stocks, managed to find a couple of havens. Brent climbed over 5%, hitting $107.48 a barrel as of 1457 GMT. BP advanced 2.8%, Shell tacked on 1.2% by close. Still, as AJ Bell’s Dan Coatsworth put it: “Momentum has been lost … it’s still a waiting game.” Reuters
3i Group dropped 18%, dragging the most on the index, after it reported that Action—its discount retail arm—expects like-for-like sales to rise 4% to 5% in 2026, about level with this year’s growth. Miners didn’t escape the slide either. With gold prices easing, Antofagasta and Fresnillo landed among the session’s worst performers.
Next surged 6.4%, leading gainers as the retailer lifted its profit outlook. CEO Simon Wolfson told Reuters that if supply snags drag on, any price rise in June or July would likely cap out at just 1% to 2%. Over in Europe, H&M flagged the risk—a drawn-out conflict could still put pressure on consumer demand.
Signs of anxiety are surfacing well beyond the markets. British households’ expectations for the economy in the coming three months sank to -53 in March, sharply lower than February’s -30. “Consumer confidence collapsed,” BRC chief executive Helen Dickinson said, as the ongoing conflict pushed inflation fears higher. Data from a CBI survey out this week pointed to retail sales sliding at their fastest rate since April 2020. Reuters
Energy’s the wild card right now. Barclays estimates that if the Strait of Hormuz stays shut, the market could lose 13 million to 14 million barrels a day, yanking a big chunk out of global supply. But if tensions ease and de-escalation looks real, they say the squeeze on oil, rate bets, and UK stocks could snap back fast—basically as quickly as it flared up.
The next real test lands Friday, with UK retail sales data set to show if the recent dip in sentiment is hitting shoppers. London, for now, keeps circling just one issue: how long this oil shock sticks around, and what slice of it ends up hitting Britain.
