LONDON, March 12, 2026, 09:03 GMT
London stocks fell in early trade on Thursday, with the FTSE 100 down 0.7% at 10,281.08 and the FTSE 250 off 0.4% at 22,287.39, as Brent crude briefly pushed above $100 a barrel after fresh attacks on Gulf shipping. The move extended Wednesday’s retreat and kept investors pinned to energy headlines. Reuters Japan
That matters now because Britain is one of Europe’s more energy-sensitive major economies. The Bank of England announces its next decision on March 19, and Britain’s budget watchdog has said inflation could end the year around 3% rather than about 2% if energy prices stay near current levels; Standard Chartered and Morgan Stanley have already pushed their first rate-cut calls into the second quarter. Reuters
It is a hard turn from late February, when the FTSE 100 was setting record closes, to early March, when British stocks logged their biggest one-day fall in nearly a year as traders cut back bets on near-term easing. The oil spike has started to unwind a trade built around cheaper money and calmer inflation. Reuters
The pressure is not confined to London. Europe’s STOXX 600 was down 0.5% by 0814 GMT, though the FTSE’s heavy energy weighting still offers some ballast: Shell and BP rose on Wednesday even as most FTSE 350 sectors fell. Reuters
Travel and leisure remain a weak patch. On the Beach suspended its annual profit forecast after warning the U.S.-Israeli war with Iran had hit demand for Mediterranean holidays, sending its shares 10% lower; CEO Shaun Morton said teams had been “working round the clock” to help affected customers. Reuters
Not every corner of the market is losing. TP ICAP rose 3.5% in early trade after the broker said volatile markets and stronger electronic trading helped lift annual pre-tax profit 3.6%. Reuters
Elsewhere, the read-across from company updates was mixed. M&G reported flat annual profit and better client flows into investment management, while Informa said it was sticking with growth plans in India, the Middle East and Africa, with about 40% of that division’s 2026 revenue already secured. Reuters
Financials still look fragile. Legal & General fell 5% at 0945 GMT on Wednesday after missing forecasts on core operating profit and on its Solvency II cover ratio, an insurance capital-strength measure, despite launching a 1.2 billion-pound buyback; CEO Antonio Simoes said, “In two years, we’ve reshaped the company.” Aviva is up about 44% since early 2024, while L&G has been broadly flat. Reuters
The home market is softening too. A RICS survey showed new buyer enquiries fell to a net balance of -26 in February, meaning more surveyors saw demand fall than rise, and Tarrant Parsons, the group’s head of market research, said “the deterioration in the geopolitical backdrop has clearly weighed on confidence.” Reuters
Retailers are sounding wary. John Lewis restored staff bonuses after a rise in annual profit but stayed cautious on 2026/27, saying the macro backdrop remained tough. Reuters
That lines up with what market economists are seeing. Chris Beauchamp at IG said “The UK is very exposed in terms of energy costs,” while Deutsche Bank economist Sanjay Raja said any support for households would have to keep “balancing immediate household relief with broader fiscal responsibility.” Reuters
The risk is that this turns quickly either way. Goldman Sachs said an April 30 quarter-point cut is still possible if the energy shock fades fast, but in a harsher scenario where flows through the Strait of Hormuz stay badly disrupted for a month, the bank sees Brent averaging $110 in March and April. For UK stocks, that leaves a market cushioned by oil majors, but still exposed if fuel costs bite harder into households and borrowing rates stay higher for longer. Reuters
