Published by Global Banking & Finance Review®
Posted on March 9, 2026
2 min readLast updated: March 9, 2026
Add as preferred source on GoogleFTSE 100 and FTSE 250 tumbled as oil spiked above $100 amid Middle East tensions, dampening hopes for Bank of England rate cuts. Iran’s appointment of hard‑line cleric Mojtaba Khamenei intensified geopolitical risks, while UK wage and bond data added to economic unease.
March 9 (Reuters) - UK stocks closed at their lowest levels in about five weeks on Monday as rising oil prices intensified inflation fears and concerns over potential interest rate hikes amid the U.S.-Israeli war on Iran.
The blue-chip FTSE 100 slipped 0.3%, while the mid-cap FTSE 250 lost 1.8%. Both indexes dropped for the third straight day.
The benchmark index has now fallen about 7% from its record high hit on February 27 as tensions escalated in the Middle East.
Iran named Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader, signalling that hardliners remain firmly in charge in Tehran.
Shares of oil majors rose, with Shell firming 2.4% and BP up 2.2%, tracking crude prices that hit their highest since 2022, briefly breaking above $119 a barrel on concerns over prolonged shipping and supply disruptions stemming from the widening conflict. [O/R]
The UK's energy index gained 2.3%.
Soaring energy prices have renewed inflation worries and prompted a sharp pullback from February when two Bank of England rate cuts were priced in.
Money markets largely expect the Bank of England to leave interest rates unchanged for the rest of the year as the war drives up energy costs and raises the spectre of another inflation wave. [BOEWATCH]
Traders were also weighing the potential costs of fresh government support for energy bills after Prime Minister Keir Starmer said easing the cost-of-living strain was at the top of his mind.
Any new support would further strain public finances and erode the buffer the government has to protect its fiscal rules.
British borrowing costs surged sharply, while sterling tumbled on Monday. [GBP/]
Adding to the gloom, the latest REC/KPMG report on jobs indicated that starting salaries for permanent staff in Britain continued to decline, albeit at a slower pace, while the downturn in new permanent hires showed signs of easing.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Vijay Kishore and Ros Russell)
FTSE indexes fell due to surging oil prices, renewed inflation fears, and concerns over potential interest rate hikes.
Rising oil prices intensified inflation worries, causing broad market declines but boosted shares of oil majors like Shell and BP.
Market pricing now indicates a more than 40% chance of a rate hike this year, reversing prior expectations for cuts.
The UK energy index outperformed, rising 1.6% as oil majors gained amid higher crude prices.
GSK's shares dipped after the announcement that it will receive up to $690 million from Alfasigma for linerixibat rights.
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