Finance
FTSE indexes set for worst week in nearly a year as middle east tensions weigh
Published by Global Banking & Finance Review®
Posted on March 6, 2026
3 min readLast updated: March 6, 2026
Quick Summary
UK’s FTSE 100 and FTSE 250 are heading for their steepest weekly losses since April 2025, dragged down by Middle East tensions that are sending oil and gas prices soaring, stoking inflation fears and dimming expectations for Bank of England rate cuts.
FTSE indexes log the worst week in a year amid Middle East conflict
Market Performance and Economic Impact
FTSE Indexes and Market Reaction
March 6 (Reuters) - The UK's main indexes on Friday logged their sharpest weekly decline in almost a year, as the escalating war in the Middle East fuelled concerns about a resurgence in inflation, while a weak U.S. jobs report added to investor worries.
The blue-chip FTSE 100 dipped 1.2%, while the FTSE 250 was down 0.8% on the day. Both indexes recorded their worst weekly showing since the April 2025 rout triggered by U.S. President Donald Trump's "Liberation Day" tariffs.
Oil Prices and Energy Sector Response
Impact on Oil Majors and Energy Exports
Shares of oil majors Shell and BP rose nearly 1.2% and 0.6% respectively, as Brent crude topped $90 a barrel for the first time in two years as the conflict kept shipping and energy exports through the vital Strait of Hormuz blocked. [O/R]
Qatar's energy minister expects all Gulf energy producers to shut down exports within weeks. In an interview with the Financial Times, he said the move could drive oil to $150 a barrel.
Interest Rate Outlook and Bond Yields
Soaring energy prices have prompted traders to sharply pull back bets of interest rate cuts this year, with money market futures pricing in just 15% odds of a 25-basis-point rate cut from the Bank of England this month, compared with 80% before the conflict began.
Concerns that the energy price spike could hurt Britain more than other countries pushed up yields on the benchmark UK government bonds this week by the most in three years.
Economic Data and Sector Movements
US Jobs Report and Economic Sentiment
Also weighing on the sentiment was data showing an unexpected decline in U.S. jobs in February, which stoked worries about the health of the world's largest economy.
UK Housing Market Trends
House Price Growth and Sector Outlook
Separately, Halifax data showed British house prices rose in February at the fastest annual pace since October, up 1.3% year-on-year and beating economists' forecasts. But the lender warned that geopolitical uncertainty and renewed inflation pressures could slow the pace of any interest rate cuts, tempering the outlook for the sector.
Notable Stock Movers
Among other movers, Flutter Entertainment rose 2.4% after activist investor Parvus Asset Management doubled its stake in the FanDuel-owner.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Maju Samuel and Andrew Heavens)
Key Takeaways
- •FTSE 100 is on pace for its worst weekly drop (>4%) since April 2025 amid volatility driven by Middle East conflict; energy firms Shell and BP outperform amid crude surge. (tradingeconomics.com)
- •Qatar’s energy minister warns that Gulf energy exports could halt within weeks, potentially driving oil toward $150 a barrel—intensifying inflation concerns. (bairdmaritime.com)
- •Traders have slashed odds of a March Bank of England rate cut from ~80% to ~15%, while Halifax reports UK house prices rose fastest year‑on‑year since October, adding complexity to BoE’s outlook.
References
Frequently Asked Questions about FTSE indexes set for worst week in nearly a year as Middle East tensions weigh
1Why are FTSE indexes facing their worst week in nearly a year?
FTSE indexes are declining due to escalating Middle East conflict raising energy prices and inflation fears.
2How are oil prices affecting the UK stock market?
Oil prices rose as Gulf exports were disrupted, boosting energy stocks but increasing inflation concerns.
3What impact has rising energy costs had on interest rate expectations?
Higher energy costs led traders to reduce their expectations for Bank of England interest rate cuts.
4How have UK house prices performed amid these tensions?
UK house prices rose 1.3% year-on-year in February, but future growth may be limited by ongoing uncertainties.
5Which notable stocks moved during the week?
Shell, BP, Flutter Entertainment, and IMI saw positive movements due to sector-specific developments.