London, March 9, 2026, 17:03 GMT
- The FTSE 100 ended the day 0.3% lower, clawing back some ground after dropping more sharply earlier in the session.
- The FTSE 250, packed with mid-caps, dropped 1.6%, with investors pulling back on several UK-centric stocks.
- Oil jumped and gilts sold off, forcing investors to reconsider what the Bank of England does next.
London stocks slumped on Monday. The FTSE 100 slipped 0.3%, while the FTSE 250 dropped a steeper 1.6%. Climbing oil prices unsettled investors, stoking fresh worries over inflation.
That late dip ended up hiding some early turbulence. Right out of the gate, traders scrambled to factor in steeper fuel bills and pressure on consumers—concerns that landed just as investors were already eyeing UK inflation and government borrowing.
Oil lit the fuse. Brent spiked above 25%, briefly reaching $119.50 a barrel, before pulling back. The U.S.-Iran war snarled supply lines and shipping, setting off the move.
It’s a real problem for Britain, which relies heavily on imported oil and gas—so when energy prices jump and the pound slips, the blow lands hard. The pound dropped as investors piled into the dollar, making UK inflation even tougher on households and businesses.
Gilts took another hit, with ten-year yields jumping higher as prices dropped. Traders in money markets flipped, now putting real weight behind the chance of a Bank of England rate increase before year-end instead of cuts. Each basis point means just 0.01 percentage point.
In London, energy names did most of the heavy lifting. Shell picked up 1.3%. BP edged up 0.3%. Those moves sent the UK energy sector higher, despite losses across much of the rest of the market.
Homebuilders and other UK cyclicals bore most of the pressure. Persimmon dropped 5.5%, Intertek slipped 4.7%, and Segro declined 4.4%, Hargreaves Lansdown data showed.
European stocks dropped to multi-month lows, hit by the oil shock and renewed stagflation worries—high inflation but sluggish growth. Airlines and real estate shares led the declines.
IG’s chief market analyst Chris Beauchamp wrote, “Stock markets have finally woken up to the implications of the Iran war,” flagging a shift among investors from hunting for gains to locking in profits. The Guardian
GSK shares edged lower after the company struck a deal with Alfasigma, handing over global rights to linerixibat in an agreement that could hit $690 million. “Sharpens GSK’s focus,” Chief Scientific Officer Tony Wood said of the move, pointing to the company’s plans for new liver disease treatments. gsk.com
Markets face a real risk if the oil shock drags on. Crude prices holding up would push investors to keep probing central banks’ willingness to “look through” rising headline inflation, while watching for any renewed bill support from governments that could put budgets under more pressure.
