LSE:ITK 17 February 2026

April 2, 2026, 4:11 AM EDT. UK markets are feeling pressure as escalating conflict in the Middle East weighs on economic outlooks. Following former President Donald Trump's stark address threatening further action against Iran, European stock markets have fallen, with Germany's DAX down 1.5%, France's CAC 40 down 1.35%, and Italy's FTSE Mib down 1.2%. London's FTSE 100 edged lower by 0.6%, buoyed slightly by oil shares. UK investors now expect two interest rate hikes by the Bank of England this year, pushing borrowing costs higher. Ten-year UK government bond yields rose 4 basis points to 4.886%, reflecting fears of an inflation spike fueled by rising energy prices. Analysts warn the outlook remains uncertain with markets repricing risks amid prolonged Middle East tensions and volatile oil supplies.