LONDON, March 29, 2026, 18:04 (BST)
London shares are looking at a shortened week, oil prices still steering sentiment. On Friday, the FTSE 100 edged down 0.05%, while the FTSE 250 dropped 1.5%. Both indexes are staring at hefty monthly declines as concerns linger over a protracted Middle East crisis. 1
The stakes for Britain are clear. With energy prices still elevated, the country sits in a riskier spot than others: the OECD now projects just 0.7% growth for the UK in 2026, and bumps up its inflation outlook to 4.0%. Markets, which once expected Bank of England rate cuts, have shifted to pricing in several hikes this year. 2
Signals from the weekend keep pushing in one direction. Gulf stocks slipped Sunday, while Brent wrapped up Friday’s session higher, ending 4.2% up at $112.57 a barrel. Negotiations are still underway in Islamabad over reopening the Strait of Hormuz, following the latest Houthi attacks. The Pentagon, according to reports, is also considering strategies that might extend to a ground campaign inside Iran. 3
London traders face a packed front half of the week, then everything grinds to a halt. Monday brings February’s money-and-credit numbers and effective-rate stats from the Bank of England. On Tuesday, revised GDP for the fourth quarter drops, along with balance-of-payments and the latest UK economic accounts. The final read on March manufacturing PMI arrives Wednesday. Services and composite PMIs won’t show up until April 7. 4
Timing is key here: the London Stock Exchange closes on Friday, April 3 for Good Friday, and stays shut through Easter Monday on April 6. So, whatever the U.S. March jobs report brings—set for Friday morning in New York—UK cash equities won’t see any immediate move. The market’s first shot at reacting comes Tuesday, April 7. 5
The divergence with continental Europe grew sharper late last week. The FTSE 250 ended down over 1.7% for the week; the STOXX 600 eked out a 0.4% rise. Healthcare offered a rare bright spot—AstraZeneca jumped 3.4% on fresh late-stage respiratory drug results, which gave the FTSE 100 a firmer footing compared to midcaps. 1
3i slid 17.6% on Thursday, with investors reacting to Action’s tepid same-store sales outlook. Lloyds dropped 2% on Friday, hit after a parliamentary committee revealed an IT glitch that exposed information from almost 500,000 customers. 6
The weakness is even sharper on the consumer front. Retail sales slid 0.4% in February, according to official data, while GfK’s confidence index slumped to -21 for March—marking the lowest level in nearly a year. “People simply do not feel the economy is robust enough” to handle the hit, said Neil Bellamy, consumer insights director at GfK. 7
Company outlooks are adjusting. Next, for one, factored in an additional 15 million pounds tied to war costs. CEO Simon Wolfson explained to Reuters that any price hike in June or July would likely be capped at “1% to 2% maximum.” If problems persist into the latter part of the year, though, he cautioned, increases could jump to 5% to 10%. 8
The bigger policy dilemma is clear. Ross Walker, chief UK economist at NatWest Markets, calls Britain’s stance “suboptimal” and notes there’s little “policy leeway.” That tone matches a market sharply pricing in tighter policy—even though, according to a Reuters poll, most economists expect the BoE to keep rates steady at 3.75% through year-end. 9
The risk swings both directions. If negotiators hammer out a real agreement to reopen Hormuz, oil prices could tumble quickly, rate expectations would shift, and some relief might flow to retailers, banks, and similar UK stocks. But if tension escalates again before markets shut on Thursday, London walks straight into its four-day break exposed to a fresh round of geopolitical worries. 10
