LONDON, March 12, 2026, 09:03 GMT
London shares slipped at the open on Thursday. The FTSE 100 dropped 0.7% to 10,281.08, while the FTSE 250 shed 0.4% to 22,287.39. Brent crude topped $100 a barrel for a short stretch following renewed Gulf shipping attacks, dragging the indexes lower for a second day and keeping traders stuck on energy news.
This is significant for Britain, a major European economy that’s particularly exposed to shifts in energy prices. The Bank of England sets its policy again on March 19. According to the country’s budget watchdog, inflation could finish the year closer to 3%—not the roughly 2% previously expected—if energy costs hold steady. Both Standard Chartered and Morgan Stanley have already moved their forecasts for the first rate cut into the second quarter.
Late February saw the FTSE 100 pushing to fresh records. Fast-forward to early March, and British stocks just suffered their steepest one-day drop in almost a year, with traders pulling back on hopes for quick rate cuts. The oil surge has begun to unravel a trade that depended on looser policy and muted inflation.
The selling isn’t just in London. As of 0814 GMT, the STOXX 600 slipped 0.5%. Yet the FTSE, propped up by its energy names, found a bit of support—Shell and BP both gained Wednesday, despite declines across most FTSE 350 groups.
Travel and leisure stocks struggled. On the Beach shelved its annual profit outlook, blaming the U.S.-Israeli war with Iran for denting appetite for Mediterranean getaways. Shares fell 10%. CEO Shaun Morton described staff “working round the clock” to support impacted customers. Reuters
Some shares are managing gains. TP ICAP jumped 3.5% out of the gate as the broker pointed to choppy markets and a boost in electronic trading for driving a 3.6% rise in annual pre-tax profit.
Updates from companies painted a mixed picture. M&G posted flat profit for the year but did see improved client flows into investment management. Informa, meanwhile, reaffirmed its growth push across India, the Middle East and Africa, noting that roughly 40% of projected 2026 revenue for that unit is already locked in.
Financials aren’t shaking off the jitters. Shares in Legal & General dropped 5% by 0945 GMT on Wednesday, after the group missed estimates on both core operating profit and its Solvency II capital buffer—even with a 1.2 billion-pound buyback on the table. “In two years, we’ve reshaped the company,” CEO Antonio Simoes said. Aviva has rallied roughly 44% since the start of 2024, but L&G’s stock has barely budged. Reuters
The housing market’s losing momentum. According to a RICS survey, new buyer enquiries dropped to a net balance of -26 in February—so more surveyors reported falling demand than rising. “The deterioration in the geopolitical backdrop has clearly weighed on confidence,” said Tarrant Parsons, head of market research at the group. Reuters
Retailers aren’t letting their guard down. John Lewis brought back its staff bonus on the back of an annual profit increase, but flagged continued caution for 2026/27, citing persistent macroeconomic headwinds.
Market economists are echoing the same message. “The UK is very exposed in terms of energy costs,” IG’s Chris Beauchamp pointed out. Sanjay Raja at Deutsche Bank added that any aid for households should still “balancing immediate household relief with broader fiscal responsibility.” Reuters
This could swing sharply in either direction. Goldman Sachs hasn’t ruled out a quarter-point cut on April 30 if the energy shock fades fast. But should disruptions through the Strait of Hormuz drag on for a month, the bank expects Brent to average $110 across March and April. UK stocks get some shelter from oil majors, yet households and rate-sensitive sectors might feel more pain if fuel prices climb and borrowing costs refuse to budge.
