FTSE 100 closes at three-week low as yields climb

Thu, 05th Mar 2026 17:41

* BoE rate cuts bets fall sharply

* Wizz Air ⁠shares slump on profit warning

* Reckitt shares fall amid challenging market

* FTSE 100 down 1.5%, FTSE 250 down 0.9%

March 5 (Reuters) - The UK's blue-chip stock index reversed earlier gains ‌to mark a three-week closing low on Thursday, as bond yields climbed on expectations that a jump ⁠in oil prices driven by the Middle East conflict will ⁠stoke inflation.

The FTSE 100 index fell 1.5% to close at its lowest level since February 12, while the FTSE 250 midcap index dipped 0.9%. British government bond yields climbed sharply as investors further reduced their bets on a Bank of England interest rate cut this ‌month. Interest rate futures were pricing in a one-in-four chance of a cut, down from around 80% a week ago.

Energy giants Shell and BP each rose about 2% as oil prices jumped more than 3%, with the escalating U.S.-Israeli war with Iran disrupting supplies and shipping, driving some major producers in the Middle East to reduce output.

Airline stocks came under fresh selling pressure ‌as surging oil prices pointed to higher fuel costs.

Wizz Air slumped 11.3% after the carrier flagged a 50 million euro ($58 million) hit to ‌its net profit from the war in Iran. Shares of EasyJet fell 5% and British Airways-operator IAG dropped 3.6%. Reckitt fell 5.8% after the maker of Durex condoms said it expected a challenging trading environment in Europe to continue, while homebuilder Taylor Wimpey lost 1.3% after it warned that profits would fall this year ‌as build cost inflation and softer pricing squeezed margins.

PageGroup tumbled 15% after the recruiter slashed its dividend, reported a sharp drop in annual profit and warned the outlook remained uncertain for the jobs ⁠market. A BoE ⁠survey showed UK employers' expectations for wage growth held at their ‌joint-lowest in nearly four years in February. Domestic economic data this week has been mixed. Activity in Britain's construction sector contracted for the 14th month in a row in February, in contrast to a more upbeat ‌picture painted by the services PMI.

Rentokil was a bright spot, jumping 10.7% to lead the FTSE 100, after the pest control firm reported a rise in annual adjusted pretax profit. (Reporting by Medha Singh and Sruthi Shankar in Bengaluru; Editing by Vijay Kishore, Kirsten Donovan)