UK equities extend drop as oil surge intensifies inflation concerns
12/03/2026 11:31
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window FTSE 100 down 0.4%, FTSE 250 down 0.3% Iranian attack on tankers escalates Middle East tensions RICS survey shows UK housing market slowdown Investors ramp up BoE rate hike bets again HSBC closed all Qatar branches amid Middle East war By Tharuniyaa Lakshmi March 12 (Reuters) - Britain's main indexes extended losses on Thursday as a surge in oil prices heightened inflation worries amid the ongoing Middle East conflict and led traders to scale back expectations of Bank of England rate cuts. The blue-chip FTSE 100 .FTSE was down 0.4% by 1057 GMT, while the mid-cap FTSE 250 .FTMC fell 0.3%. Crude prices climbed back to $100 a barrel earlier in the session after Iranian boats appeared to have attacked two fuel tankers in Iraqi waters, as the conflict between Iran and U.S.-Israeli forces looked far from resolved. O/R Oil prices LCOc1, CLc1 were last rising more than 6% and are up more than 32% since the start of March. Britain is seen as more exposed than many other Western countries to an energy price shock due to its stretched public finances and its heavy reliance on imported gas. "The longer the disruption goes on, the greater the impact on energy prices and in turn global inflation. This then has implications for interest rates too," said Danni Hewson, head of financial analysis at AJ Bell. Money markets returned to betting on a BoE rate hike, pricing in a roughly 54% chance of a quarter-point rise in borrowing costs in December, compared with expectations of no change on Wednesday. Most other FTSE 350 sub-sectors were in the red, but defence FTNMX502010, mining .FTNMX551030, and utilities .FTUB6510 bucked the trend. A survey from RICS showed Britain's housing market has lost steam as demand faded from buyers concerned about the implications of the Middle East conflict and possible increases in mortgage rates on the back of energy price rises. Among other movers, HSBC HSBA.L fell 5.8% after the bank closed all branches in Qatar until further notice amid the Middle East conflict. TP ICAP TCAPI.L rose 7.3% to the top of the mid-cap index after the inter-dealer broker posted a 3.6% rise in annual pre-tax profit. (Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Shreya Biswas) ((tharuniyaa@thomsonreuters.com))