UK's main indexes post biggest monthly drop since 2020 as Middle East conflict weighs
March 31 (Reuters) - British stocks edged higher on Tuesday but logged their worst monthly showing since 2020 as the Middle East conflict drove a surge in oil prices, fuelling worries about inflation and slowing economic growth.
The blue-chip index FTSE 100 .FTSE rose 0.5% but snapped an eight-month winning streak. The mid-cap FTSE 250 .FTMC climbed 1.2% on the day, but ended a three-month run of gains.
U.S. Defense Secretary Pete Hegseth said on Tuesday the next few days in the war against Iran would be decisive and warned Tehran that the conflict would intensify if it did not make a deal.
Precious metals miners .FTNMX551030 rose 4.2% and provided the biggest boost to the index as gold prices climbed, with investors flocking to the safe haven amid inflation fears and expectations of a hawkish monetary policy response. GOL/
Official data from the ONS confirmed that Britain's economy barely expanded at the end of 2025, adding to the challenge for the government to keep growth on track this year with the Iran war likely to push up inflation and hit demand.
A BRC survey showed shop price inflation rose in March, putting the Bank of England in focus as it monitors food prices and inflation expectations.
Investors are betting on two, or possibly three, quarter-point rate hikes by the Bank of England before the end of this year, a sharp reversal from rate cuts seen by traders before the conflict.
Raspberry Pi RPI.L soared 47% after the single-board computer maker posted better-than-expected rise in annual adjusted core earnings.
Unilever ULVR.L dropped 7.2% to its worst day since 2008 after the consumer goods firm said it was in advanced talks to combine its food business with spice maker McCormick MKC.N in a potential deal that would deliver $15.7 billion in cash and give shareholders majority control of the merged entity.
