UK's main indexes drop 1% on Middle East uncertainty
March 26 (Reuters) - London's FTSE indexes dropped more than 1% on Thursday, as lingering uncertainty about a potential end to the Middle East conflict weighed on sentiment.
U.S. President Donald Trump said Iran was desperate to reach a deal to end nearly four weeks of fighting, contradicting Iran’s foreign minister, who said Tehran was reviewing a U.S. proposal but had no plans to enter talks aimed at winding down the conflict.
The blue-chip FTSE 100 index .FTSE fell 1.1% by 1013 GMT, snapping a two‑day winning streak, while the midcap FTSE 250 .FTMC fell 1.2%.
Most FTSE 350 sub-indexes traded in the red, except the energy index .FTNMX601010, which gained 0.6% as oil prices clawed back losses from the previous session on worries that prolonged fighting in the Middle East could further disrupt energy flows.
Precious metal miners .FTNMX551030 fell 4.4% as gold prices weakened amid uncertainty surrounding the conflict.
Britain's economic growth prospects this year received the sharpest downgrade of any major economy in the OECD's interim forecast update following the U.S.-Israeli war on Iran, while inflation is set to rise faster too.
Markets have priced in two or three quarter-point hikes from the Bank of England this year, a sharp reversal from earlier this year when investors were expecting rate cuts.
Next NXT.L rose 5.1% to the top of the benchmark after CEO Simon Wolfson said that the clothing retailer has not seen a noticeable drop off in UK sales since the U.S.-Israeli war on Iran started at the end of February.
Currys CURY.L fell 8.4% after the electrical retailer said CEO Alex Baldock will step down, ending a tenure that delivered a turnaround in profit and margins for the company.
3i Group III.L fell 7.6% after the private equity firm said that its discount retailer Action expects like-for-like sales growth between 4% and 5% in 2026, broadly similar to the 4.9% growth it recorded in 2025.
