Published by Global Banking & Finance Review®
Posted on March 23, 2026
3 min readLast updated: March 23, 2026
Add as preferred source on GoogleFTSE 100 plunged ~2.4% on March 23, 2026—the biggest drop in months—driven by surging energy costs and heightened BoE rate‑hike expectations amid intensifying Iran war tensions.
March 23 (Reuters) - The main UK indexes slumped on Monday and were on track to confirm a correction, as investors priced in the Bank of England hiking interest rates sharply with the Middle East conflict driving up energy costs.
The blue-chip FTSE 100 dropped 2.4% to its lowest level in three months at 1103 GMT. The index is now down about 11% since the war erupted earlier this month, on course to confirm that it has been in correction since hitting a record high in late February.
The mid-cap FTSE 250 tumbled 3.2% to its lowest level since May 2025.
Britain's 10-year government bond yields rose to their highest since July 2008 at 5.068% as markets priced in four BoE interest rate rises for this year, a sharp reversal from expectations of two rates in 2026.
British Prime Minister Keir Starmer is set to chair an emergency meeting on the economic fallout from the war in Iran on Monday, with finance minister Rachel Reeves and Bank of England Governor Andrew Bailey in attendance, the government said.
Stocks across the globe sold off after Iran warned it would target Israeli power plants and facilities supporting U.S. bases in the Gulf if U.S. President Donald Trump follows through on his threat to "obliterate" Iran's power network.
All sectors traded in red, with precious metal miners being the biggest drag, after gold sank more than 5% to a four‑month low as the Middle East tensions entered its fourth week. [GOL/]
Among other stocks, BT fell 6.1% after Britain said it would regulate BT Openreach's national broadband network for another five years with a price cap on a wider range of speeds, to drive competition and extend fibre connections to the final fifth of the country's premises.
Spire Healthcare fell 19.3% to its lowest since December 2020 after buyout talks with Bridgepoint and Triton end, and both parties said they have no intention to make an offer for the private hospital group.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Janane Venkatraman)
The FTSE 100 is in correction due to investor concerns over Bank of England rate hikes and economic fallout from the Iran conflict, which has raised energy costs.
The FTSE 100 has dropped about 11% since the war erupted earlier this month.
Markets are pricing in four Bank of England interest rate rises for 2025, a sharp reversal from earlier expectations.
All sectors traded in red, with precious metal miners suffering the most as gold prices sank due to rising tensions.
Prime Minister Keir Starmer is chairing an emergency meeting with finance and Bank of England officials to address the economic fallout from the Iran war.
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